Board of Trustees Meeting Minutes April 5, 1999






April 5, 1999



Pursuant to notice, the annual meeting of owners of Mad River Glen Cooperative was held on April 5, 1999, at the Basebox, Mad River Glen Ski Area, in Fayston, Vermont, and convened at 5:00 p.m. Approximately 100 owners were present in person as were all members of the Cooperatives board of trustees. The president, Mary Kirkpatrick, presided, and the minutes were kept by the secretary, Robin Bleier, with the assistance of the Cooperatives counsel, Peter J. Monte.


Presidents Report:

The Cooperatives president, Mary Kirkpatrick, reported to the owners on significant events and accomplishments of the Cooperative over the past year:

The Cooperative succeeded in meeting its June, 1998, deadline under the Mad River Corporation mortgage to have sold 1,667 shares. The mortgage balance now stands under $300,000 and will be paid from the proceeds of installment shares (subject to the Cooperatives obligation in December, 2000, to pay Mad River Corporation the amount of any delinquent installments then outstanding).


The Cooperative survived last winters ice storm. It has procured full insurance recovery for property damage and business interruption. All trails have been cleared by hired workers with a very large assistance from volunteer labor provided by the Cooperatives owners. Work remains required to clean up the last vestiges of the ice storm from the woods, and the Cooperative will count on volunteer labor to complete this work.


Bill “Go-Go-Go” Lawrence died last fall. The Cooperative made a contribution to his family, and the president expressed her thanks to the representatives of the Cooperative who attended Bills funeral services.


David Hatoff was hired to fill the share marketing and shareholder relations position on the Cooperatives staff. The president commended Mr. Hatoff for maintaining share sales on target despite prolonged periods of low patronage at the ski area because of poor weather conditions.


The Cooperatives final audit for the 1997-98 fiscal year shows an operating profit of $312,000.


The most successful event of the past year was the reconstruction of towers, bases and line equipment for the Sunnyside double chair lift. The president commended staff for the planning and project oversight which resulted in this project being completed on time and within budget. The president also thanked the Cooperatives owners who contributed $130,000 financing for this project.


Ski area projects showed substantial growth over the past year, especially the environmental program, ski club and ski racing program. The president noted that the junior race program doubled in size over the last year and thereby contributed welcomed crowds to the Basebox during slow periods at the ski area.


The Cooperative continues to foster good relations with the Homeowners Association. These efforts have resulted in additional share sales to nearby homeowners.


The price for Cooperative shares was increased from $1,500 to $1,750 to reflect an increase in the value of shares and to recover a greater proportion of share marketing costs.


An expansion of the Cricket Club is under active review by staff and the trustees. This effort is a tangible demonstration of managements commitment to encouraging ski area patronage by children and families to assure continuing success.


The Cooperative successfully reserved water rights in a nearby aquifer to assure an available resource to meet future water needs for the ski area.


Mad River Glen ski areas 50th anniversary celebration was a great success.


The Gear Page (which markets souvenir hard goods over the Internet and through sales from the office) continues its growth and evolution. As a new venture for the ski area, the Gear Page remains under watchful evaluation by management and the trustees.


The Cooperatives first patronage rebate has been approved by the board of trustees subject to final approval of the auditors for tax clearance.


A dialogue has been opened with the Green Mountain Club. The Green Mountain Club has requested a formal easement for protection of the segment of the Long Trail which crosses Mad River Glen ski area, and this request is under active consideration by the board of trustees.


The Founders Plaque will soon become a reality because of the planning and dialog between the trustees and the owners over the last year. The trustees are aware of the opposition from a relatively small number of owners, but have been encouraged to complete the project by the favorable comments of other owners and by a desire to complete a commitment made in the promotional materials circulated at the time of the Cooperatives birth.


Planning is well underway for a rebuild in the year 2000 of the single chair lift. Later in tonights meeting, the owners will be informed about the available options and their respective costs. The trustees plan to complete their study of the single chair over the summer months and to present final recommendations for owner approval at a special meeting during Green and Gold weekend.



The president informed the owners that the board of trustees will hold its annual reorganization meeting when the results of tonights trustee elections are known. At the reorganization meeting, the trustees will establish a meeting schedule for the summer which will be posted in the Basebox and published in the Echo. The president encouraged owners to attend trustee meetings to keep informed about the Cooperatives activities and to provide the trustees with valued perspectives on pending business.



Treasurers Report:


Deri Meier, the Cooperatives treasurer, reported to the owners. The treasurer provided a written summary of this fiscal years operating results and capital expenditures; the present status of the Cooperatives mortgage to Mad River Corporation; and of proposed sources and uses of funds for the single chair project. A copy of this summary is appended to these minutes.

The treasurer informed the owners that management now predicts a $120,000 operating profit for the 1997-98 fiscal year. This expected profit falls below budget projections because of last winters poor weather and snow conditions. The treasurer stressed, however, that the attainment of a significant operating profit during a year of poor snow conditions demonstrates the strength of this Cooperative.


The treasurer opined that this year marks a time of strategic transition for the Cooperative. Over the last three years following the Cooperatives birth, financial survival has been the concentration of Cooperatives management. During this start-up, survival phase, the Cooperative met its initial share sale deadline and demonstrated the capacity to operate the ski area profitably.


This year marks the Cooperatives transition to the next phase of its strategic life: making choices to enhance the ski area and improve its business. Successful completion of the Sunnyside chair lift reconstruction, planning for reconstruction of the single chair, and active consideration of Cricket Club expansion are mileposts which mark the Cooperatives transition to this new phase.


Nominations for Trustee Candidates


The president surrendered the meeting chair to the Cooperatives counsel, Peter Monte. Counsel informed the owners that as required by the bylaws, the trustees nominations and elections committee had proposed the slate of candidates which appeared on absentee ballots. Counsel informed the owners that he would entertain nominations for any additional candidates to stand for election to the board of trustees. No nominations were offered from the floor, so counsel declared nominations closed. The president resumed the chair for the meeting.




Owners Questions and Comments:


The president invited the owners to pose any questions or to make any comments they may have concerning any business of the Cooperative. The president reminded the owners that the general managers report would include information concerning the proposed single chair project, and she requested that questions or comments on the single chair be postponed until after the general managers report.



A lively discussion followed. The discussion included:


Patronage rebate: Owners requested clarification and inquired why the trustees would deprive the Cooperative of cash by declaring a rebate. The treasurer explained that the trustees have approved a rebate but the commitment is subject to approval by the auditor of pending tax questions. The rebate is in the amount of 7 percent of patronage profits for a total of approximately $31,000, but only $6,000 of this amount would be paid out in cash, and the balance will be retained by the Cooperative. The trustees declared the rebate to save income tax which would otherwise be payable.


Cooperative acquisition of Sugarbush and/or Sugarbush North: The Cooperative has no plans to acquire either ski area.


Lockers: Will locker space be increased? The general manager explained that management will implement a new policy requiring advance payment which should force out a number of renters who are behind on their rent and thereby make additional lockers available. The Cooperatives capital plans include eventual improvement of the locker room area.


Ski shop: Does the Cooperative plan to operate the ski shop? The general manager explained that the Cooperatives management annually reviews whether to renew the ski shop lease to an outside operator or, alternatively, to take over in-house operation of the ski shop. To date, this analysis has shown the capital requirements and business risks of Cooperative operation of the ski shop are excessive in light of other financial and management requirements for the core business. In response to owner requests, the board of trustees committed to conducting another feasibility study this summer for Cooperative to take over the ski shop.


General Managers Report:



Robert Mazza, the general manager, reported to the trustees. Unfavorable snow and weather conditions resulted in a difficult operating season. Full operations did not begin until mid-January, bad weather returned for most of February, and March was the only good-weather month of the year. He noted that it is more difficult to manage a ski season which starts slowly and finishes strongly because it is difficult to retain employees. The general manager stressed, however, that the attainment of a significant profit for this difficult year is a testament to the loyal support of the Cooperatives owners and the inherent attractions of the Mad River Glen ski area. Strong support by the Cooperatives owners enabled Mad River Glen to survive a sharp decline in day-ticket sales upon which most ski areas depend for financial survival.


The general manager informed the owners of activities which will continue at Mad River Glen during the summer months. A contractor will operate a summer camp for children seven to twelve years old. The Cooperative will hold a barbeque on July 3 and a golf tournament in late summer. Four workdays will be held to continue the valuable contributions owners have made under the able planning of the Cooperatives facilities committee.


The facilities committee is also investigating improvements to the Slalom Hill shack for use as a permanent center for naturalists studies. The facilities committee is also undertaking a long-range forestry plan for regeneration. The ski area forests are mature and, hence, subject to deterioration by natural processes. Long-range planning is necessary to preserve the character of the ski areas forests.


The general manager introduced David Hatoff and commended him for his performance in handling share marketing. The general manager offered the floor to the share marketing/shareholder relations director.


The share marketing/shareholder relations director reported that 1,830 shares of the Cooperative have been sold. This fiscal year, 130 shares have been sold toward the annual 175 share target. 28 shares were sold during March, 1999.


The share marketing/shareholder relations director informed the owners of refinements in the share marketing program including a planned update of the combined ski area/share sale marketing plan. He encouraged owners to continue their enthusiastic efforts as the Cooperatives primary sale-share force.


The general manager next relinquished the floor to Jamey Wimble, assistant general manager, to inform the owners of managements planning and findings regarding the rebuild of the single chair lift.


The assistant general manager informed the owners that a wide-range of options for the single chair are available to the Cooperative. Management seeks guidance from the owners to choose among these options. Management plans over the summer to consider comments of the owners, complete further inquiries, and to formulate a final plan for presentation to the owners at a special meeting at Green and Gold weekend.



The assistant general manager outlined the project options which management has developed and the estimated prices for each.


Choices include:


Complete replacement of the entire chair lift in a single project versus replacement of the drive station as phase 1 with later replacement of line equipment.


Replacement of towers and bases during the line equipment upgrade versus retaining existing towers and replacement only of the return station, sheaves, cables and chairs.

Retaining a diesel drive (with all new components) or conversion to an electric drive with a diesel backup.


Retaining the existing “vaulted” drive versus replacement with an overhead drive similar to the Sunnyside chair lift.


Use of tube towers versus fabrication of new lattice towers.


The assistant general manager informed the owners that the cost of constructing an entirely new single chair lift (incorporating none of the existing equipment and fixtures) is now estimated to cost $1,050,000. The estimated cost of the project would increase to $1,356,000 if the existing towers are retained (with new sheave assemblies) and mounted on new bases. This cost would be reduced by approximately $12,000 for each existing tower foundation which could be reused if the concrete and anchor bolts prove sound after required “pull tests”. If the line equipment is replaced in a separate phase, the estimated cost is $750,000.


Employing a diesel motor for the primary drive is estimated to cost $343,000 compared with $282,000 for an electric primary motor. Operating costs for either a diesel or electric drive are about equal, with lower maintenance expense likely to give a slight expense edge for an electric drive. The project is planned to include a diesel backup for any electric drive to allow operation during any electric power outages.


The assistant general manager invited questions and comments from the owners. The discussion included:


What urgency prompts consideration of rebuilding the single chair? There is no new urgency. The single chair rebuild is being considered as a matter of prudence — the existing equipment is fifty years old, and there are no off-the-shelf replacements available for critical components. Because a serious breakdown would cripple ski area operations for the remainder of a ski season, replacement of the single chair is the highest capital planning priority for the Cooperative.


Are the existing towers damaged by metal fatigue? Lattice towers are less vulnerable than tube towers to metal fatigue. Contractors estimate that the existing towers have thirty years of remaining useful life.


What are the benefits and burdens of declaring the single chair lift part of a historic preservation program? Staff has scheduled a meeting later this month with representatives of historic preservation agencies to answer these questions.


How will the single chair project be financed? The treasurer referred the owners to the attached summary. The treasurer stated that if share sales or operating profits did not materialize as estimated, the Cooperative had opportunities for alternative financing through conventional bank borrowing, borrowing from owners (as was an ingredient in the Sunnyside chair project), or a special share-sale drive with proceeds dedicated to the single chair. The treasurer stated that the Cooperatives present capital structure involved only a five percent debt load, and informal inquiries with banks showed that $500,000 in borrowings was readily available, which should be sufficient to replace the drive station (which is the most vulnerable component of the single chair).


Why are replacement of existing tower foundations included in the cost estimate? State law requires pull testing of existing towers and foundations if the single chair line equipment is substantially rebuilt. Although there are no apparent problems with the concrete, pull tests might disclose problems with the concrete, and the metal anchoring attachments (which connect the tower to the concrete base) are likely to experience some failure. The $1,356,000 cost estimate is a worst-case analysis which assumes that all bases would fail. There is an estimated cost savings of $12,000 for each base which could be reused. The $1,050,000 estimate for a totally new lift assumes that no existing bases would be reused because modern design and materials call for fewer bases which would be spaced further apart than the existing foundations.


Will new chairs be incorporated into rebuilding the line? Yes. The new chairs will be fabricated to the design of the existing chairs. Existing chairs were sandblasted and rewelded in the 1980s, and that process cannot be repeated. Existing chairs would be sold to defray the cost of the replacements.


Following this open discussion, the president called for a straw vote from the owners in attendance. The question presented was:

Do the owners support incurring approximately a thirty percent increase ($1,356,000 versus $1,050,000) for the single chair project to retain the appearance of the existing single chair lift by utilizing lattice towers on or near the existing foundations?


Voting results: By show of hands the owners supported a thirty percent project cost increase to retain the appearance of the single chair by a margin of approximately three-to-one.


New Business


Owners commended staff and volunteers for their superlative effort in clearing Mad River Glen ski area from ice storm damage. Owners noted that the condition of the slopes and surrounding forest at Mad River Glen have benefitted from these efforts in a manner which is obvious by comparison to other nearby ski areas.


Owners sought more detail concerning the discussions between the Cooperative and Green Mountain Club regarding protection of the Long Trail. The president informed the owners that the dialogue has just opened. Green Mountain Club has approached the Cooperative as part of its on-going effort to procure protective easements for those few portions of the Long Trail which are not now formally protected. The easement would assure Green Mountain Club continued use of the hiking trail and an existing shelter, but would preserve the Cooperatives right to maintain and replace existing improvements and to continue using necessary elements of the ski area. Green Mountain Club has offered to pay a sum in the neighborhood of $10,000 to acquire this easement. Before the Cooperative makes a commitment, the trustees are awaiting formal documents which will provide the detail of what limitations its grant of a protective easement will entail.




The president informed the owners that the polls would remain open for one-half hour following adjournment to allow owners to cast their ballots for the trustee elections. The certification of the nomination and election committee of voting on trustee elections is appended to the minutes of this meeting. This certification shows the following results:


Elected as in-state trustees for a three-year term: Mary Kirkpatrick and Allan Russell.


Elected as out-of-state trustee for a three-year term: Leigh Michl.




There being no further business to come before the meeting and upon motion duly made and seconded, it was

VOTED: To adjourn.

Adjourned accordingly at 6:38 p.m.





Robin “Rocky” Bleier, Secretary





Certification of Nomination and Election Committee

The undersigned members of the Nomination and Election Committee of Mad River Glen Cooperative hereby certify the following voting results for Trustee elections at the Cooperatives Annual Meeting of Owners held April 5, 1999:


In-State Candidates:


Rich Aiken 311


Crosby Hard 87


Mary Kirkpatrick 571


Stephen Lande 93


Allan Russell 312


In-State Write-in:


Charlie Tipper 1


William Davison 2


Judy Aiken 2


John Olsen 1


Allan Moats 1


Patty Pruitt 1


Out-of-State Candidates:


Leigh Michl 408


Mark Renson 152


Out-of-State Write-ins:


John Dickey 1


Dennis Edwards 2


Linda Stuglis 1


Mark Lamont 1





Based on the foregoing, Mary Kirkpatrick and Allan Russell were elected to three-year terms as in-state trustees, and Leigh Michl has been elected to a three-year term as out-of-state trustee.




Mary Kirkpatrick, Chair




Joshua Tower




Robin Bleier





Minutes of Board of Trustees Held April 10, 1999


After due notice, a meeting of the Board of Trustees of Mad River Glen Cooperative was convened at 9:05 a.m. on April 10, 1999, at the Basebox, at Mad River Glen Ski Area in Fayston, Vermont. Trustees Bleier, Curtis, Eaton, Kirkpatrick, Meier, Russell and Michl were present and voting throughout. Trustees Schultz and Singer were absent. The president, Ms. Kirkpatrick, presided. The minutes were kept by Mr. Bleier, the Secretary, with the assistance of Cooperatives counsel, Peter Monte.


Minutes of Prior Meetings


After discussion and upon motion duly made and seconded, it was unanimously VOTED: To approve as corrected the minutes of the March 13, 1999, meeting of the Board of Trustees.


Owner Comments:


Mr. Michl observed that the retirement from the board of trustees of Josh Tower leaves a void in the Cooperatives mechanism for timely response to e-mail from shareholders because Mr. Tower formerly handled this task. The president explained that staff responds to technical inquiries and other correspondence not addressed specifically to the board of trustees. The board of trustees discusses and responds to questions and comments addressed to the board at each trustee meeting. Because individual trustees are one step removed from the details of day-to-day management, there is a danger that an individual trustees response may be in error but cloaked with apparent “official” authority. Nevertheless, there is a benefit for one or more trustees to monitor the web site closely, offering comment as appropriate (as an owner rather as than a trustee) and keeping the board informed about significant discussions on the web site. Mr. Michl volunteered to replace Mr. Tower and to perform this role.


General Managers Report:


Robert Mazza, the general manager, reported to the trustees. The ski season ended abruptly after the annual meeting. March provided a strong finish which salvaged a season otherwise characterized primarily by poor weather.


Staff and the single chair committee met on April 9 with representatives of historic preservation agencies to explore the costs and benefits of registration as a historic site. (A more detailed discussion of this meeting appears below in these minutes.)


The general manager reported that employee evaluations are under way. Department head evaluations are completed and evaluations of subordinate staff are in process.


In response to owners discussion at the annual meeting, the general manager has begun a comprehensive evaluation of operations of the ski shop at Mad River Glen. The general manager is acquiring information to judge whether the Cooperative should (1) make no changes at this time; (2) eliminate the present practice of allowing Mad Money to be used at par in the ski shop; or (3) terminating the lease with Alpine Options and assuming direct operation by the Cooperative. The first step in this evaluation is the ongoing negotiations with Alpine Options which will provide a benchmark against which the other choices may be evaluated.


The general manager presented the trustees with a summary of last years submissions to the Cooperatives suggestion box. All suggestions were discussed. Earmarked for action were suggestions concerning refinement of the Basebox menu, improvements to the sound system, provision of drinking water on the second floor of the Basebox and exploring the formation of a free-style competition team.


The general manager informed the trustees that the Cricket Club building had been leased to an operator who would conduct a summer camp at Mad River Glen for seven to twelve year olds from June through August.


Election of Officers:


The president informed the board that the bylaws provide that the terms of officers of the Cooperative expire each year at the first trustees meeting following the annual meeting of owners. The president requested nominations for the office of president. Mr. Eaton nominated Deri Meier, seconded by Mr. Bleier. No other nominations were offered. Mr. Meier was elected president unanimously (the candidate abstaining).


The president requested nominations for the office of vice president. Mr. Meier nominated Mr. Eaton, seconded by Mr. Bleier. No other nominations were offered. Mr. Eaton was elected vice president unanimously (the candidate abstaining).


The president requested nominations for the office of treasurer. Mr. Meier nominated Leigh Michl, seconded by Mr. Russell. No other nominations were offered. Mr. Michl was elected treasurer unanimously (the candidate abstaining).


The president requested nominations for the office of secretary. Mr. Russell nominated Mary Kirkpatrick, seconded by Mr. Meier. No other nominations were offered. Ms. Kirkpatrick was elected secretary. (Mr. Bleier voted nay, the candidate abstained, and the remained trustees voted in favor of Ms. Kirkpatricks election.)


Committee Designations


The president informed the trustees that reorganization of standing committees was in order. The bylaws provide that the officers just elected serve as the executive committee. The trustees discussed the composition of other standing committees and unanimously voted to nominate the trustees named below to each (the nominated trustees will select owners to complete the composition of each committee):


Finance Committee: Michl (chair), Curtis and Russell


Personnel: Schultz (chair), Bleier, Meier,

Curtis, Eaton, and Kirkpatrick.


Facilities: Bleier (chair) and Russell.


Single Chair: Kirkpatrick (chair), Bleier and



Board Development: Eaton (Chair), Kirkpatrick, Meier


Mr. Meier recommended that the share marketing/share relations committee be disbanded. The functions of this former committee have been shifted to become a staff responsibility rather than a responsibility of the board of trustees. The board concurred in Mr. Meiers recommendation and no share marketing/shareholder relations committee was appointed.


Meeting Dates


After discussion, the trustees established the following meeting schedule through Green and Gold Weekend. All meetings will be held at the Basebox at Mad River Glen ski area:



Time (Hour 9:00 a.m. unless otherwise stated


May 8 Saturday


June 12 Saturday


July 3 Saturday


August 14 Saturday


September 18 Saturday


October 2 Saturday 2:00 p.m.


Town of Fayston Property Tax Relief Fund:


Ms. Kirkpatrick summarized the presentation to the trustees following the last board meeting offered by representatives of the Town of Fayston Education Fund. Beginning in 1998, there has been a drastic change in Vermonts tax mechanism for funding local education. The Town of Fayston tax rate has increased dramatically because of these changes. Faystons tax increase arises primarily because it is home to Mad River Glen and Mount Ellen Ski areas (which makes commercial properties a disproportionate percentage of Faystons tax base).


Fayston faced a seventy percent increase in local taxes over the next five years. To reduce this increase, the Town has created a tax-exempt trust fund to provide private funding to cover a portion of its school costs. The Freeman Foundation will match any contributions made to this Town fund. To date, the Town has procured funding which will reduce the projected tax increase by two-thirds.


Mad River Glen ski area will benefit directly from the Towns efforts for private school funding. The ski areas 1998 taxes were $28,000. 1999 taxes would have been $38,500 (without the new fund), but will be $32,000 (because the fund is established). The Town requests that Mad River Glen contribute its resulting savings to the fund to further reduce projected tax increases and to join with other businesses (including the Sugarbush ski area) which have chosen to share in the burden as well as the benefit of this private funding mechanism. Specifically, the Town seeks a contribution from the Cooperative of $6,500 this year and $6,500 next year.


Owners Friedman and Aiken spoke in opposition to a Cooperative contribution. They stated that Faystons private financing plan subverts a critical element of the States efforts to equalize


educational opportunities and funding in all towns. They characterized a contribution to Faystons fund as bad citizenship from a statewide perspective.


Ms. Kirkpatrick stated that Mad River Glens tax reductions of approximately $6,500 in each of the next two years is a reality because of the Towns success in establishing this fund. She characterized the issue as being whether the Cooperative gets a “free ride” on these efforts or becomes a participant.


Mr. Meier stated that the Cooperatives participation in this funding is a sensitive and important issue. He suggested that the trustees should defer making a decision until it receives a specific written analysis from the Town. Mr. Russell requested that staff provide the trustees with a projection of what the Cooperatives taxes will be for the next five years, first without a contribution from the Cooperative and next, with a Cooperative contribution. He also requested that staff calculate the after-tax cost to the Cooperative of making this contribution.


The trustees deferred a decision on this issue until after it receives further analysis from staff and the Town.


Rental and Repair Shop Budget Presentation:


Chip Hammond, manager of the rental and repair shop, presented his budget for the 1999-2000 season. Next year, he projects $64,000 in expenses, $69,500 in revenues for a budgeted operating profit of $5,600. Major changes in the budget proposed for next year are replacement of one-half of the rental inventory, improvement of the building to eliminate air quality problems, staff salary increases, and refurbishing the ski tuner.


Mr. Meier inquired why a fifty percent replacement of the rental inventory was required next year because he understood that the Cooperative had in place a business plan for annual replacement of twenty-five percent of the inventory, which should have avoided an unusual expenditure in any year. The general manager responded that last years slow season forced cutbacks in planned inventory replacement.


Mr. Russell offered to work with the rental and repair shop manager on the ski tuner replacement.


Income and Expense Summary:


Sharon Crawford, the office manager, circulated a statement of operating results for the month of March and for the year-to-date. The summary included the following:




Period Income Expense Net Income (Loss)


March, 1999 $333,200 $204,200 $130,000


YTD $1,380,000 $873,000 $506,622















February Income and Telefest Comparisons:


The general manager presented a summary of a three-year history of February operations. He presented this summary in response to questions raised by the trustees at the March meeting inquiring why February, 1999, expenses had not been cut more drastically in light of the low skier traffic that month because of weather conditions.


The general manager stated that Mad Rivers operating philosophy has changed. It is now staffs policy to reduce services only in very extreme weather conditions. If it is possible to ski, even if conditions are poor, staff now operates the ski area to provide a full level of services to satisfy the demands and expectations of seasons pass holders and owners of the Cooperative. Under the present policy, March is the first month of the ski season when services are curtailed to reflect lower patronage.


Mr. Bleier stated that he believes that the new operating policy is correct. Season pass sales have increased substantially in recent years. This pass sale increase creates a demand for services, but also provides revenues to satisfy the demand.


Mr. Meier stated that the ski areas former policy of reducing services during times of low patronage reduced the financial risk of ski area operations. The trustees, management, and owners of the Cooperative must recognize that the new policy represents a fundamental change. Mr. Meier stated that he prefers a middle ground — refining the present policy to allow more flexibility and a greater willingness to reduce services — but he recognizes that a majority of the trustees probably do not share his conservative view on this policy.


The general manager then responded to the trustees inquiry in March for an analysis of the financial cost to the Cooperative of the Telemark Festival. The general manager estimated that the Cooperative lost approximately $8,000 in revenues because of the Telemark Festival. The Telemark Festival occurred on a weekend which included the best skiing of the year, so the Cooperative would have been in a position to “sell out” day tickets at the full price. The ticket revenues from Festival participants was shared by the Cooperative with the Festival organizer, thus causing the lost revenue.


The general manager asserts that this lost revenue is well-justified by the public relations value and goodwill which accrues to the Cooperative through hosting the Telemark Festival.


Staff is considering refinements of the Festival arrangements to reduce the financial impact on the Cooperative. Those refinements may include the prohibition of the use of vouchers or discounted tickets by Festival participants and/or the imposition of a $10 surcharge on such tickets (pass holders already pay a $10 surcharge to participate in the Festival).


No figures are readily available, but there may be some amelioration of the $8,000 Festival revenue loss through increased ticket sales to participants on the Friday and Monday surrounding the Festival.


Trustee Curtis suggested that staff may wish to propose in negotiations with the Festival organizer a tiered revenue-sharing structure which would assure the organizer of a fair compensation for his efforts, but which would provide the Cooperative with additional revenues when the Festival coincides with sell-out weather. Other trustees suggested that staff may wish to consider shifting the Festival by a week or two to reduce conflicts with other ski area activities.


Mr. Bleier stated that he is less concerned with loss revenues than with directing efforts toward leveraging the Festivals advantages by tie-in to other telemark activities.


Cricket Club Expansion:


Assistant general manager Jamie Wimble described staffs analysis of a possible expansion of the Cricket Club nursery. He informed the trustees that zoning setback requirements preclude a first-floor expansion of the nursery. Therefore, a second story addition is the only available choice on the site.


Callie McAllister, nursery manager, informed the trustees that there were records of fifty to sixty turn-aways for the season. Turn-aways with more than one child, and individuals who declined to call on busy weekends, suggest that the number of lost patrons is higher. The addition of the second floor would add twenty children to the nursery capacity and, therefore, would increase revenues for the nursery between $9,600 and $14,400 per year, variable expenses would increase approximately $5,700 and fixed expenses would increase approximately $1,200 annually.


The nursery manager reminded trustees that the present scale of nursery operations routinely operates a break-even. The proposed expansion would make it possible for the nursery to generate an operating profit, even after paying the additional costs associated with the expansion.


The assistant general manager estimated the expansion costs to be $121,122. This cost includes mandatory code upgrades for the entire building and approximately $30,000 to install an elevator. There is a waiver process available for the elevator, and if a waiver is granted, the expansion costs would be reduced to approximately $90,000.


Mr. Russell inquired whether staff had considered alternatives including a sale of the existing nursery structure, and reinvesting the sale proceeds along with the expansion costs into the construction of an entirely new nursery. Staff stated that the location of the nursery is critical for convenience of parents in dropping off children and checking on their condition throughout the day. In the absence of an alternative site with these attributes, staff has not considered relocation of the nursery.


Marketing manager, Eric Friedman, stated that there is a clear marketing value to enhancing the nursery service because of the marketing thrust to attract families. He stated, however, that there was no marketing urgency to this effort and, therefore, it became a question of priorities for the board to set.


Share marketing/shareholder relations manager, David Hatoff, stated that share marketing is also based in part on a family orientation. But he predicted the impact on increased share sales would not be immediate.


Counsel noted that the terms of the Mad River Corporation required the mortgagees consent for a sale of the nursery property or the use of mortgage financing to pay for the addition.


The trustees observed that if the addition can be financed through a conventional mortgage, the fifty to sixty turn-aways would generate sufficient revenue to amortize the mortgage. The trustees requested that staff provide the board with a cash flow analysis to confirm that the expansion would generate positive cash flows; to determine whether a waiver of the elevator requirement is available; and to explore alternate locations for the nursery. The trustees will consider the nursery expansion after staff reports on these issues.


Single Chair Committee Report — Historic Preservation:


Ms. Kirkpatrick reported on the meeting held on March 13, 1999, by the single chair committee with representatives of historic preservation agencies. She reported the following recommendations of the single chair committee after this meeting:


The Cooperative should apply promptly to list Mad River Glen ski area and its included buildings as a historic preservation district. There are no “strings” attached to such designation. Strings limiting development possibilities already exist under Act 250 because mere eligibility, without formal listing, triggers Act 250 scrutiny. Additional strings would arise if the Cooperative uses State or federal money for improvements, but no such monies are now available or are likely to be available in the near future. There is no immediate financial benefit to listing the ski area as a historic preservation district. The benefits arise from publicity and marketing opportunities.


The Cooperative should apply promptly to the local historic preservation agencies for a financial grant to analyze the feasibility of “restoring” rather than “replacing” the single chair lift. The committee learned at the meeting that up to $7,500 may be available in grant funds for this analysis. If the analysis proves “restoration” is a viable alternative, the committee learned that $100,000 to $300,000 in private foundation grants may be available to subsidize the additional costs of restoration. It may be necessary for the Cooperative to form a tax exempt entity to receive and supervise disbursement of these grant funds.


Mr. Meier informed the trustees that he was the sole dissenting vote on the single chair committee against the above recommendations. He objects to the committee recommendations on the following grounds:


Involvement with historic preservation agencies means that the Cooperative must share control of its project with outside agencies.


The proposed studies are likely to create delays in an already tight time line. It will take time to complete the study and additional time to reconcile the studys findings with the requirements of a contractor/manufacturer for the lift; and


The engineering study will incur direct costs beyond those to be covered by a grant — this effort will consume staff and committee time and energy.


The general manager and assistant general manager spoke in opposition to a restoration plan which would include retention of the existing rack and pinion mechanism for the single chair drive. They assert that the rack and pinion drive has been obsolete for thirty years and its retention is a bad idea, whoever might pay for it. The restored drive would remain vulnerable to a breakdown which could not be repaired with readily available parts and, therefore, would necessitate closing the single chair for an entire season. They recommended that the proper course of action is for the Cooperative staff and trustees to design the best possible project and then submit the Cooperatives design to foundations for assistance rather than to let foundations govern the project planning.


After discussion, and upon motion duly made and seconded made by Mr. Russell and seconded by Mr. Curtis, it was VOTED: To apply to the local historic preservation society for a grant to pay for a feasibility study for restoration of the single chair lift.

Voting Results: In favor: Bleier, Curtis, Eaton,Kirkpatrick, Russell and Michl. Against: Meier.


Ms. Kirkpatrick left the meeting at 1:40 p.m. because of prior commitments. Upon her departure, Mr. Meier assumed the chair of the meeting.


Discount Ticket Analysis:


The marketing director circulated a memorandum which detailed the Cooperatives distribution during the 1998-99 ski season of discounted and complimentary ski passes. Those passes included discounts required through membership in the Vermont Ski Areas Association, industry complimentary tickets, the Mad River exchange with pass holders of Jay Peak and Smugglers Notch, mid-week pass discounts and January student specials. Overall, the marketing director is evaluating whether tweaking of the existing program is appropriate, but he strongly recommends keeping the major features intact.


The marketing director noted that usage of distributed complimentary tickets amounted to fifty-five percent compared with twenty-six percent usage in the preceding season. The Sunday $15 half-day price has apparently resulted in a significant increase in patronage without an apparent decrease in full-day ticket sales.


The trustees will study the analysis provided by the marketing director and will discuss the topic in more detail at the May presentation for the marketing budget.


Executive Session:


The trustees entered executive session at 2:00 to discuss personnel issues. The general manager and legal counsel were invited to attend. The trustees resumed open session at 2:15 p.m.




There being no further business to come before the meeting, after discussion and upon motion duly made and seconded it was unanimously


VOTED: To adjourn.


Adjourned accordingly at 2:15 p.m.




A true record.


ATTEST: ________________________________


Robin “Rocky” Bleier, Secretary

Mad River Glen

PO Box 1089

Waitsfield, VT 05673

(802) 496-3551

(802) 496-3562 Fax