MadRiver Glen Cooperative
Board of Trustees
Minutes of Meeting
February 8, 2003
After due notice, a meeting of the board of trustees of the Mad River Glen Cooperative was convened at 5:00 P.M. on February 8, 2003, at the Basebox at Mad River Glen Ski Area in Fayston, Vermont. Trustees Bleier, Coleman, Eaton, Michl, Moulton, Schultz and Steines were present (Putnam and Moats were absent). The Cooperative’s president presided. Cooperative counsel, Peter Monte, was present. Margo Wade kept the minutes.
Call to Order
President Michl called the meeting to order at 5:09 p.m.
Approval of Prior Minutes
Upon motion duly made by Ms. Steines, and seconded Mr. Eaton, it was
VOTED: To accept the January 11, 2003 Board of Trustees meeting minutes.
VOTING: In Favor – Bleier, Coleman, Eaton, Michl, Moulton, Steines
Abstaining – Schultz
Shareholder Comments
Mr. Finnerty commended the Elections Committee for nominating a qualified slate of candidates.
Mr. Shultz passed along comments raised by two shareholders about lowering the number of tickets sold in order to shorten the lift lines. Ms. Steines stated the Finance Committee is continuing to review the current limit.
Mr. Bleier recommended adding a women’s telemark division to the mogul challenge. Mr. Shultz requested that men’s and women’s 60+ categories be added.
Ms. Putnam (via email) asked that the suggestion box suggestions be posted, and suggested Robin or Wren and/or a portion of Porcupine occasionally remain un-groomed for beginning bump skiers.
Mr. Bleier also asked for monthly suggestion box reports. A suggestion box has been added to the Shareholder only web page.
Mr. Heinzerling commended the groomers and support staff for terrific performance this year. He knows a number of older skiers who have returned because of the grooming. He is pleased with the new single seat pads, and is concerned about the forest cover and feels we are loosing it at an exponential rate.
Management Report
The following is the February 8, 2003 Management Report as submitted.
Mountain Operations:
Operations have run well for the month. Saturday January 25th we had to replace the bearings in the lift 2 motor. The crew worked until 12:30 AM and had it ready to run for Sunday morning. No lost time. Monday January 27th we had a drive fault on lift 2. The lift was down for part of the day. We had electricians and Fincor specialist involved chasing down the problem. A solution was found but our electrical contractor and I are not convinced it is or was the problem. We will continue to monitor it.
ESWA went well. About 120 writers attended. Many of them skied MRG and attended our banquet. This is a big deal and it is great that it came through the chamber. Very little cost to MRG
Department heads have turned in their capital request and will be submitted to the board at the March meeting.
Share sales:
Share sales are going well. 7 shares were sold against a budget of 4 for the month of January. YTD we have sold 20 against a budget of 16. When we have the snow, we do well across the board.
Financials:
January financials look great. We held most of our expenses while increasing revenue. As of January 31, we are $96,000 ahead of budget for net ordinary income YTD. Cash is in good shape. Total cash is $730,000 as of January 31.
<<<end report>>>
General Discussion
In response to Mr. Coleman’s question, Mr. Wimble reported the overall feedback has been excellent, we are running at a steady pace, the customers are happy, employee morale is good. He pointed out that the Pub numbers are up because they have been able to turn tables over more quickly this year. There was general agreement that the cafeteria is doing a great job.
In response to Mr. Bleier’s question, Mr. Wimble replied that comp tickets include VIP tickets comprising of VSAA trade, ski shop and ski area employees, and 70+.
Mr. Wimble is still concerned about the electrical problem with the double and anticipates a complete tear down this summer.
Mr. Bleier praised the staff for their dedication and morale as evidenced in the long hours worked to replace the bearings on the lift 2 motor. He feels this also reflects well on management.
Mr. Wimble added the ATM machine has been a great customer service benefit plus it has already brought in $1700 in fees. The mountain purchased the machine for $5000.
The board unanimously accepted the management report.
January Profit & Loss (see attached)
Financial results of operation for the last month and for the fiscal year to date may be summarized as follows:
|
Period |
Income |
Expense |
Profit (Loss) |
|
January 2003 |
$469,129 |
$280,038 |
$158,470 |
|
YTD |
$1,336,119 |
$856,345 |
$391,971 |
Compared to the 00/01 season we are two weeks ahead.
Committee Reports
Facilities: Mr. Coleman reported the Facilities Committee has met and has been authorized by the board to prepare a budget and solicit bids for development of a master plan. They are looking for comments on the scoping document, previously emailed to the board, and plan to send the document out to a number of architects to help develop a budget for development of a facilities master plan. The committee anticipates soliciting architects who are members and/or skiers. They will prepare selection criteria, which will need board approval.
Ms. Steins suggested bartering for services. She also recommended having a budget ready for the next meeting for incorporation into discussion about next season’s overall budgets
The committee has also reviewed the major facilities repairs and budget that Mr. Wimble has on task for this year and agree the activities are appropriate. Further more the committee recommends beginning to accrue monies for the upgrade of the ski patrol building, which will be a relatively costly project ($250K-$350K). They anticipate that the building will include an upgraded locker room, which will generate income and take pressure off the Basebox. The Rental Shop would take over the existing locker room, which would allow an increase in size, services and income for that department.
The committee will be meeting again at the end of the month. The minutes and scoping document will be posted on the list serve.
Finance: Ms. Steines pointed out the need for the Facilities and Finance Committees to begin working together on capital funding. The Finance committee has been investigating capital funding sources and reviewing forecasted income statements for the next 20 years. Based on the current capital 20 year plan it is becoming evident that we will have a shortfall depending on different scenarios.
The committee has been investigating the capital funding options and it appears the most viable sources for funding will be share sales or bonds. The line of credit is a short term stop gap option with high interest rates, and bank loans are not great options because terms are poor.
The committee discussions have been detailed and Ms. Steines raised concerns with micro-management issues. She asked the board for feedback about how deeply the board wanted the committee delve into financial details. Mr. Shultz feels the committee has two roles. One as an advisory committee for the GM, at his pleasure, and the second to review the annual audit. Mr. Moulton stated the committee is performing financial due diligence for the board. Mr. Michl added that once the more detailed financial review is complete, which includes determining how to finance the single repair/replacement and the steady state of operation the primary function of the committee will be reviewing the annual audit.
Some of the issues and questions the committee has been discussing include:
– the need to maximize revenue and minimize cost
– impact on the overall skiing environment depending on the focus (max rev vs. min cost)
– comparing various financial/capital improvement scenarios and the results of each
– determining the cost of the targeted capital improvement(s)
– how best to finance improvements
– how to ensure fiscal responsibility and financial stability in ten to twenty years
The committee does not see a major need to sell shares today, but feels at some point in the future we will need to sell hundreds of share to finance capital improvements. Currently the number of shareholders is capped at 2,000, and we would need a bylaw amendment to change that number. Does the Co-op want to increase the number of share holders or focus on selling more shares to the current shareholder base. The committee is working under the assumption that the bylaws will not change and the number of shareholder will remains at the current cap of 2,000 and shares capped at 3,000.
The committee will submit a report to the board defining the financial/capital improvement scenarios for further discussion. The committee wants to be respectful of Mr. Wimble’s management responsibilities and asks him to communicate to the committee if he is uncomfortable with their detailed financial oversight.
The next Finance Committee meeting is scheduled on February 27th at 3:00 p.m.
Shareholders Relations: Mr. Moulton reported the committee met twice since the last board meeting. Meetings are scheduled on the first Tuesday of the month at 6:00 p.m. in the Basebox.
The committee is still looking for direction about the shareholder lapel pin. After discussion it was decided the committee should roll shareholder identification, including a pin or sticker, into the Shareholder Community Plan and Shareholder Relations Committee budget. The outline for the plan will be emailed to the board for feedback and discussion at the next meeting.
The committee recommends provision for food/hors d’oeuvres for the annual meeting.
There was discussion about the Basebox calendar and Co-op related scheduling in general and who is responsible for managing the calendar, getting the info on the calendar, keeping the calendar updated, what meetings and events are included on the calendar, and posting meeting/event dates on the bulletin boards. It was decided Mr. Wimble would develop procedures for managing the master calendar, what the trustees’ responsibilities are regarding researching Basebox availability and communicating function/event dates, who will implement postings info on the bulletin boards, and how the info will be distribute to the board and staff.
Board Development: Ms. Steines had nothing to report.
Elections Committee: Mr. Bleier reported Mr. Finnerty has stepped off the committee and Dot Helling has taken his place. At last night’s meeting the committee finalized the candidates’ bios and continues to prepare for the candidate’s forum, which is scheduled on February 15th from 4:45 p.m. to 6:45 p.m. The committee hopes to have the candidate forum audio and transcript available on the owner only web page. Mr. Eaton will be working with the staff on signage regarding noise control and monitors.
Personnel: Mr.Michl stated GM compensation will be discussed in executive session and a new employee incentive program to be discussed later in the meeting.
20th Committee: Mr. Moats was absent, but continues to work on the project.
Incentive Proposal (Action Item) (see attached)
Mr. Michl introduced the proposal and added that it is simple and eliminates any subjectivity. Mr. Wimble explained the proposal in more detail. Past programs were complex, inconsistent and open to abuse. This proposal is profit driven and based on set operating profit increments. He shared the proposal with department heads and received positive feedback. Mr. Michl suggested including the GM in the plan rather than having a separate incentive program. Mr. Wimble supported his inclusion. He feels it would support a team effort rather than handling the GM’s incentive differently. The mountain will assist employees by placing all or some of the bonus in the employee’s 401K, if they so choose.
Ms. Steines suggested capping the plan at 10% and amending the proposal to $500+. Mr. Coleman suggested adding “yearly compensation” for clarification.
Upon motion duly made by Ms. Steines, and seconded Mr. Shultz, it was unanimously
VOTED: To accept the incentive program proposal with the two changes.
Mr. Michl asked Mr. Wimble to incorporate the two changes and add the incentive program to the policy book.
Vote on Board Candidate Slate
2003 candidates In-State: Jay Appleton
Paul Finnerty
Judy Larsen-DiMario
Sarah Haviland
Out-of-State: Carol Pierce
Deb Steines
Upon motion duly made by Mr. Bleier, and seconded Mr. Eaton, it was unanimously
VOTED: To accept the slate of 2003 board candidates.
Mr. Bleier reminded the board candidates can petition, with 20 shareholder signatures, to get included on the ballot and be included in the mailing if the petition is received by February 7th. Owners can petition at anytime to run a write-in campaign.
Upon motion duly made by Ms. Steines, and seconded Mr. Moulton, it was unanimously
VOTED: To add “adding the mission statement to the bylaws” on the annual election ballot. A note will be included stating the mission will be an addition to the bylaws and does not change the Article 3 purpose.
Forest Management Committee
Mr. Bleier raised concern with the health of the forest, the need to pay more attention to the forest management plan, and therefore the basis for creating the forest management committee. He feels strongly the need to address what is happening to the forest and act aggressively to save what we have. The forest has experienced both natural and man made changes, and we should err on the conservative side. Mr. Michl stated that all of the trustees agree, but are not certain that a new committee is the proper way to address the issue. The health of the forest is identified as a priority in the strategic plan. Is a new committee the way to proceed or is there another mechanism equally effective.
Mr. Appleton stated the need to have an annual budgeted forest management program. The forest management committee would be close to what the facilities committee performs.
Mr. Michl suggested including forest management in the GM’s responsibilities which can be assessed during the performance appraisal. Mr. Shultz identified two approaches 1) to delegate the responsibility totally to management, or 2) to have a committee oversee what management does on a more regular basis. Mr. Eaton suggested a committee could investigate further what we could and should be doing per the plan.
Mr. Wimble added he agrees with the concerns, but is comfortable with the current plan. The consulting forester (Joe), with management, has developed a program that will essentially test the management plan. The plan can be changed as needed. He has not seen backwards progress, though we may not be addressing everything identified in the plan as quickly as we anticipated. It will take time for the forest to regenerate.
Mr. Michl questioned if monthly monitoring, by a committee, is necessary since the forests changes slowly over time. Mr. Shultz suggested a short term committee. Mr. Bleier believes the motivation for creating the committee is to have more folks involved in oversight of the forest. Mr. Coleman suggested an annual forest audit with knowledgeable people participating and developing written recommendations.
There was general agreement that forest management is important, the question boiled down to who drives it? Management or a committee? Mr. Wimble proposed having Joe and Sean return to perform an annual one day audit and have them submit feedback about how we are progressing with the plan. Mr. Appleton suggested having them visit the area twice, once in the winter and once in the summer.
The board agreed that Mr. Wimble will hire the independent foresters to conduct a bi-annual audit of the forest and report the foresters finding to the board as an agenda item.
New Business/Further Shareholder Comment
Ms. Pierce raised concern that abutting property owners’ actions can impact the mountain ecology. She suggested a task force to interface between homeowners and the ski area. With regard to the forest cover she suggested walking behind her house to inspect the health of the forest.
She supports the shareholder-only lapel pin, and felt it would be a badge of honor.
In response to Mr. Kalkstein’s question about how he runs his venture capital business, Mr. Michl responded that oversight is relatively hands off unless the business is struggling financially. Mr. Kalkstein suggested the same model for the Co-op. Mr. Wimble added thus far, he is comfortable with the finance committee.
Mr. Heinzerling, in the name of forest health, urged the board and management not to promote woods skiing via the snow report, and advertising. He thanked Mr. Shultz and Mr. Bleier for their outstanding service to the Co-op.
Upcoming events
February 15 – Candidates Forum at 4:45 in the Basebox
March 8 – trustees meeting at 5:00 p.m. in the Basebox
Executive Session
The board entered into executive session at 7:04 p.m. and came out of executive session at 7:25 p.m.
Adjournment
There being no further business to come before the board the meeting adjourned at 7:25 p.m.
Respectfully submitted,
Margo B. Wade
A true record.
ATTEST:
Lu Putnam, Secretary
Attachments
a. January Profit & Loss
b. Incentive Program
