Board of Trustees Meeting Minutes July 13, 2002






Mad River Glen Cooperative
Board of Trustees

Minutes of Meeting
July 13, 2002


After due notice, a meeting of the board of trustees of the Mad River Glen Cooperative was convened at 8:00 a.m. on July 13, 2002 at the Basebox at Mad River Glen Ski Area in Fayston, Vermont. Trustees Bleier, Coleman, Eaton, Michl, Moats, Moulton, Putnam, and Steines were present (Schultz was absent). The Cooperative’s president presided. Peter Monte, Cooperative’s counsel was present from 8:00 a.m. – 10:00 a.m. Margo Wade kept the meeting minutes.


Call to Order

President Michl called the meeting to order at 8:06 a.m. and gave a brief overview of the July 11, 2002 trustee meeting/telephone conference and the structure of this meeting. The meeting was divided into two meetings, which allowed covering items that are more straightforward on July 11th while the focus of this meeting will be the Facilities Committee report and 2002/2003 budget.


Shareholder Comments

Mr. Bleier protested the telephone conference held on Thursday, July 11th. He was concerned that it was held for board efficiency and convenience at the expense of the owners, especially those not on line. He feels it flies in the face of the bylaws, which state that owners shall not be excluded from meetings. Mr. Michl stated that Mr. Bleier’s is one perspective and that the board respected his opinion.


Shareholders Rights and Responsibility

Mr. Moulton presented the final Guide to Shareholder Rights and Responsibilities as drafted by the Shareholders Relations Committee. The Committee feels the document is not an addendum to the bylaws, but rather to be used as a guide. It is a tool for people to have and understand their rights and responsibilities as shareholders. The Committee recommends posting it on web site, distributing to new shareholders, and noticing existing shareholders in the Echo & list server (MRG Coop and MRG info lists).


Regarding I. 5. Education, Training and Information, Ms. Steines asked where the proposed language came from and if the committee really thought that we did this. Mr. Moulton responded that he did not know the history of the statement.


Regarding II. Mad River Glen Shareholders Rights, Ms. Steines questioned the statement “Members shall have preferred access to the services provided by the Cooperative…” Mr. Bleier pointed out this language is included in the bylaws.


After discussion the following changes were made:

– First paragraph, strike the 2nd sentence

– III. Patronize the Cooperative – change ‘must’ to ‘should’

Upon a motion duly made by Mr. Coleman, and seconded by Mr. Eaton it was unanimously

VOTED: To accept the Guide to Shareholder Rights and Responsibilities with the two discussed changes.

Mr. Moulton will email the final document to Eric for distribution as agreed upon above.


2002/2003 Budget

Mr. Wimble briefly reviewed the proposed 2002/2003 Budget. The figures were derived by averaging past years data.


Highlights included: marketing, with an increased cost for the area guide; other income, which anticipates 10K for worker comp insurance and a 35K ticket sales variable; credit card service charges, which were low for last year; directors meeting exp. includes dollars for strategic planning and seminars; and other expense, which includes staff bonus & owner bond credit. The budgeted net ordinary income for the year is 167K without depreciation or amortization.


Mr. Wimble distributed and explained his methodology for the Cash Flow Statement for 2002/2003, which calculates cash flow as if Coop hits the budget as proposed. The 150K Single Reserve is not included in the statement.


There was some discussion about share sales and what a realistic sales number should be. Last years budget was 80 shares, to date we have only sold 24, therefore we have decreased next years budget to 40 shares.


Mr. Meier pointed out that the statement effectively double counts Season Pass Sales and APR by including it in Oct 2002 and again in Sept 2003. Keeping 281K out of the Sept 2003 makes the picture significantly different. This method counts dollars in advance and therefore, the picture is grimmer than the statement shows. Mr. Michl pointed out that the method is consistence each year in showing actual cash that comes in, therefore is not a one-time event. Mr. Coleman added that the crossover is causing a skewed year-end cash picture and the actual year-end picture is a bit skinnier. He suggested taking the $75K for the Single Reserve Fund out in October rather that September. We should be conveying the actual cash situation. Mr. Bleier suggested a footnote to explain actual September cash situation to be included on the statement. Mr. Wimble concurred.


The discussion moved to the “Funding Sources” handouts, which forecasted the Coop’s cash picture for the next 4, 10 and 20 years comparing this year’s budgeted net ordinary income (167K) and a budget net ordinary income of 225K, both with 3-4% pricing increases over the period studied. The figures assume that 75 shares are sold each year. The end-result of the exercise showed that a net ordinary income 167K budget, with relevant percentage price increases over time, is not sustainable. The 225K-budgeted income, with relevant percentage price increases over time, is more realistic.


Ms. Steines recommended that pricing and budgets be looked at simultaneously in May.


Mr. Michl pointed out that our uncontrollable expenses (workers comp insurance, health care, and property taxes) coupled with dwindling share sales are outpacing improvements made in the service departments and number of skier days. We are not viable in the long term unless our operating income is at least 225K.


Mr. Michl reported that the Finance Committee recommends increasing this year’s income budget to 225K, but Mr. Wimble would like to stay at the proposed 167K income because he feels it is too late to increase prices (material has already gone to print) and ramifications to cutting expenses will hurt the services provided on the mountain.


Mr. Wimble stated that the uncontrollable costs (insurance – workers comp, liability, health care, and taxes) have been increasing approximately 20% each year throughout the Coop’s history. This translates to a 40-50K yearly increase on taxes and insurance. Other expenses such as fuel and electricity have been relatively stable; inflation translates to 16.5K; wages with a modest 3% increase results in 20K increase; all totaling approximately 100K increase in expenses each year. The dollars must come from somewhere. We are showing some growth, but not enough to cover the increase in expenses. We have to be realistic with pricing.


Mr. Wimble laid out the following possible areas to cut costs:

  • Marketing – Valley Transit (cost 6K), Valley marketing initiative (cost 6K)
    • both will hurt our support of the valley community, also may help in short term but hurt in the long run
  • Special Events – bar bands, triple crown, etc.
  • Environmental Program – runs at a loss 10K
  • Facilities – employee educational fund
  • Travel & Parties – employee party, cost to attend the NSAA show
  • Contribution & Donations – 3K to the community
  • Wage Increase – possibly hold off for a year
  • Bonus Program – 20K
  • Directors Meeting Expense – strategic planning and classes

All cost cutting of the above items will have ramifications. Most significantly the effects will be seen on the mountain, employee morale, and drop in level of service. Mr. Wimble believes the additional funds should come from the income side. We need to look at a higher net operating income. Mr. Friedman pointed out that the web site is maintained by shareholder volunteers, collateral design cost very low because of volunteer work.


Mr. Michl pointed out that if we meet the 225K income level we will be okay in the future, but we are not hitting those levels on average. We are weather dependent, and there is no time like the present to control expenses. Maybe we have gone too far in the types and service levels provided. Mr. Mouton disagreed and stated that if we are considering raising rates the last thing we want to do is cut services. Especially where a cut would only have a single percentage point impact. Ms. Steines added that we will have to accept the fact that we need to raise rates. Ms. Putnam agreed with Mr. Mouton, and added that share sales could have more of an impact if marketed/sold more aggressively.


There was discussion about how to sell shares, strategies that have worked in the past, having more “share sales” presence, track expenses (wages, administrative), and using the Stark Mt. Foundation. No provision has been included in the calculations for the 19th and 20th Hole and Rockefeller’s triangle, which will have to be addressed in the future.


Mr. Coleman added that we have not addressed strategies yet. We are trying a new pricing scheme and must watch the effect. We may want to look at raising season pass prices, which may be more elastic that we think. We have not challenged our “give away mentality.” Mr. Wimble pointed out that we did increase the cost of the midweek pass last year and saw a decrease in sales but an increase in 6-day pass sales.


Mr. Michl asked if we want to approve a budget for the current year that is not sustainable in the long run. Mr. Coleman supported approving the budget, while looking into other methods of financing major capital improvements (approximately 1.5 million within 10 years). How we achieve our goals we need to develop in the strategic planning process.


Mr. Bleier requested that share marketing be added as a line item. Mr. Wimble responded that share sales expenses are included in the marketing budget. Mr. Bleier asked if it is cost effective to have Eric spending time on share sales, and that we should take advantage of owners’ willingness to help. Mr. Wimble cautioned against crying wolf because there may be occasion when we really need to go to the shareholders.


Mr. Eaton added that we are committed on the price side, change in the way we sell shares will not have an immediate impact, and on the cost side, there is not anything we can do to increase operating profits by reducing expenses. We are entering a year where we are increasing the ticket price and we need to determine how that influences the financials. Mr. Michl stated that our expenses are rising. Is our “low overhead / low expenses” mentality correct. Are we low expenses?


Mr. Wimble believes we have found the right level of labor and we should not see jumps similar to the past. Changes between the coop and previous owner have leveled off. Now we are dealing with uncontrollables.


Mr. Coleman pointed out that insurance is 15.2% of the expense budget and if the history were tracked, we would probably see huge increase. He suggested we undertake an exercise to control uncontrollable expenses such as heating fuel and electricity consumption, and property tax assessment. There may be a vehicle to create a lower tax burden (e.g. land conservation) and/or revisit the single heat/electricity conversion to determine feasibility and possible cost savings.


Judy DiMario suggested the following methods to control expenses and raise capital:

  • Fundraising – The shareholders are a group of very dedicated people, if you do not ask for contributions you will not get them.
  • Tax burden – We may want to investigate the State current use program, which may allow for a lower assessment. A parcel is taxed on the current use of the land (i.e. forest land)
  • Energy conservation – There are great possibilities for dealing with energy issues on a proactive basis.

Mr. Kalkstein we need to cultivate our shareholders and pay attention to our attitudes towards them. We have a unique asset that translates in to enthusiasm to sell more shares. That enthusiasm may help us achieve our goals. Ms. Steines reminded the group that the intent of selling shares was to raise capital not funds operating costs. Mr. Michl cautioned against assuming we will get funding through fundraising, how successful the new ticket pricing will be, and how the economy will impact skier days. Mr. Heinzerling advocated pushing share sales, volunteers will come forward to assist, and potential buyers still exist. He feels that funders are not being aggressively pursued for the Stark Mt. Foundation. Mr. Michl and Ms. Steines concurred.


Mr. Bleier asked if bringing the retail shop in-house had been considered. Mr. Wimble responded that the issue is being investigated.

Upon a MOTION duly made by Mr. Coleman, and seconded by Mr. Moulton it was

VOTED: To approve the 2002/2003 Budget as presented, with $167,000 estimate net income.

In favor: Bleier, Coleman, Eaton, Moats, Moulton, Putnam, Steines

Against: Michl


Mr. Bleier requested that the owners should be notified of the financial situation. Mr. Michl stated the he would address it in his Echo letter. Mr. Michl added that he voted against the budget because he feels the number is low and we are relying on optimistic assumptions to hit a low number. He also feels he would cut ancillary expenses that have taken on a life of their own over time.


Short-Term Loan Line of Credit vs. CD Cash In


Mr. Wimble reported that insurance refunds are on the way, therefore does not see the need to access these monies. The CD terms have changed and what we have will mature shortly.


Facilities Committee Reports

Mr. Michl introduced the discussion that began with the new single building and preserving architectural heritage, further determining what it is that we are trying to preserve, and the Facilities Committee’s charter.


Mr. Wimble explained the original intent of the new building, which included:

  • Keeping water from leaking into the vault, which is where all internal components of the lift are housed
  • A new roof and needed additional storage (350 sf)
  • The project was included on the capital list, which was reviewed and approved by the committee and twice by the board
  • The change from the original building included a slight increase of roof pitch and the building is 18″ wider
  • The back building roof was stepped down to decrease visual impact of going full height

Mr. Moulton questioned the focus of the discussion, which he understood to be the role of the Facilities Committee. He stated that management did its job, apprised us of a problem and solution, and well executed the solution. Mr. Wimble noted that currently there is no process in place, though; management involved the Facilities Committee in all of the capital projects list. Mr. Bleier concurred with Mr. Moulton’s comments and stated that he participated in the committee’s discussion. He suggested that drawings of the building may have prevented the confusion/concerns.


Mr. Coleman reviewed the history of the mission statement and presented the proposed mission.


Mr. Moats pointed out that the mission assumes a governing architectural vision and the need for establishing architectural consensus. Mr. Coleman responded that the building design criteria process would establish the architectural vision.


Mr. Coleman stated that the committees’ vision is to create a master plan for the area, which would include establishing what we have, what we need, and a ten-year base area plan. We anticipate getting the architectural community involved to design opportunities. We feel it is a multi year process with an end product being a graphic pictorial of what the base area may look like in ten years. Then everyone will know what buildings are going to look like when re-built. He is not projecting what the plan will be, rather that it will come out in the process. He also feels it could be a great basis for capital campaign.


Mr. Wimble noted that he and Mr. Friedman have been investigating listing with the National Historic Register and will keep the board apprised of the process.


Mr. Bleier suggested that the owners should have been consulted about managements needs for the building. Mr. Coleman responded that we are trying to get away from the old process and build consensus for the bigger picture. If we do not we will always be revisiting projects after they have been completed. It destroys the sense of community. To build a sense of community we need to build a vision, to build a vision we need to have something to look at and feel good about. The old process is tearing apart the fabric of our community. The strategic process the board has undertaken and developing a master plan for the base area will do that. In addition, if we do not commit ourselves to the process 100% we will erode confidence. Mr. Moulton added that we are talking about a process that we build into a function of the Facilities Committee.


Mr. Coleman added that in order to do this correctly, would require funding and external assistance. The committee can start the process, but realistically it is a big job. Mr. Eaton asked what a realistic time line for the master plan. Mr. Coleman responded that he did not know and would get back to the board. Mr. Moats suggested that we not rely on the vision from the strategic planning to drive the Facilities Committee’s mission, rather both efforts progress simultaneously.

Mission of Facility Committee
1) The Committee in conjunction with the Management will provide input to the Board of Directors on the general facilities at Mad River Glen to include the descriptions, conditions, and general information on all facilities at the ski area.  (NOT included in this scope would be the mountain trails, flora and fauna, and related elements, i.e. water bars, signs, culverts, etc.)

2) The Committee in conjunction with the Management will make recommendations on the needed and/or required improvements, maintenance and general upkeep of the facilities.

3) The Committee in conjunction with the Management will undertake specific assignments from the Board related to develop consensus architectural vision which will govern subsequent construction projects, establishing building design criteria, conducting design reviews, recommendations and/or establishing an approval process.

Upon a MOTION duly made by Mr. Moulton, and seconded by Mr. Steines it was unanimously

VOTED: To approve the Facilities Committee mission statement as amended.

(NOTE: the Mission included above is as amended)


Mr. Michl requested that the mission be posted on the list serve and web site. Mr. Moulton stated that we would hear back from the committee regarding the status of the visioning process. Mr. Moats suggested also including in the posting strong encouragement for shareholders to participate in the visioning process. Mr. Friedman added that a picture/model would spur share sales. Mr. Kalkstein further characterized the vision statement which identifies assumptions and the over arching goal. He also commended the board of the superb thinking taking place today.


New Business / Further Shareholder Comment

In response to Mr. Bleier’s question, Ms. Crawford stated that approximately 35 shares have been tendered to date, with a waiting list of 10 to 15 shareholders. Mr. Friedman reported that some feed back was received after this years election process regarding the dislike of the political nature. Mr. Wimble added that he had some concern for the basis of the tendering. Mr. Bleier added that it may be too early to determine a trend.


Mr. Moats asked if management felt the new election process is moving in the right direction. Mr. Friedman responded that it was more the general campaigning process that was discouraging. Mr. Moats added that for some shareholders this is a sacred place of peace, a get away.


Ms. Steines departed at 10:55 a.m.


Mr. Bleier added that the improved process would cost less, give candidates a better forum to express themselves, be more proactive and inclusive, and will bring many benefits. Mr. Coleman requested to include discussion of the election recommendations at the next board meeting.


With regard to shareholder responsibility, Mr. Kalkstein stated that democracy is a messy, but healthy process. It is not always a comfortable process. The worse thing to do is try to control it. Let the shareholders and candidates drive the process. Let the free market determine what the results will be. The result will be a more thoughtful, better informed group. Mr. Michl responded that the board is trying to achieve, not limit, the balance between the democratic process and invading our sense of hallowed ground. He feels the new election process is a great improvement.


Mr. Moulton questioned whether marketing has been overly sensitive about indications to the public that there was controversy and he feels we do not need to be sensitive. He believes the process is not a negative to share sales or the public and people should see up side, passion and enthusiasm. Visibility of the process will fuel the “Mad River mystique” and that we are someplace different. Mr. Michl requested that the discussion avoid discussion of personal.


Ms. Putnam suggested an Echo article focusing on share sales referred by current shareholder and an incentive program (i.e. one day of cutting lines, etc.). Mr. Moulton asked how we could encourage this kind of implementation. Mr. Michl suggested that Shareholders Relation Committee study share sales efforts.


Mr. Bleier requested a breakout of legal expense in the financial report. Mr. Wimble responded it is reported under office admin, and that approximately $17K is spent on legal services, leaving $6K for auditing and tax return costs.


Mr. Heinzerling asked the board to consider making a shareholder list available including name, city & state. Shareholders could be given the option to be included or not, and to include more information (address, phone, etc.). A minimal fee could be charge. He feels the majority of shareholder want the kind of list. Mr. Michl suggested the Shareholders Relations Committee discuss the item and report back to the board with a suggestion including legal concerns and an estimate of cost. Mr. Moats suggested starting with an empty list and asking shareholders if they would like to be part of the directory (address book). Ms. Putnam suggested including the request in the APR mailing. Mr. Kalkstein cautioned the board to clarify the legal implications of “the list” vs. a shareholder directory.


Mr. Bleier asked if there was any dissension in the Finance Committees vote on the budget. Mr. Michl responded that the vote was unanimous with everyone agreeing the figure was too high. Mr. Bleier requested inclusion of discussion of their minutes.


Mr. Bleier and Mr. Moulton asked for clarification on posting of committee minutes, which Mr. Bleier understands to require board approval before posting. Mr. Michl state that he would look into the matter and report back. Mr. Friedman added that the staff is not receiving all committee minutes for posting.


Mr. Heinzerling congratulated the board, all preceding boards, and staff for the time, effort, and dedication. He finds it truly amazing that a ski area could be run as a cooperative. It could not happen without all this work. Mr. Michl added praise for the high level of discourse and participation. We have accomplished a lot. We are in a different period of coop history and we are all working well together.



There being no further business to come before the board, President Michl adjourned the meeting at 11:15 a.m.


Respectfully submitted,

Margo B. Wade

A true record.



Lu Putnam, Secretary



  • Shareholder Rights and Responsibilities
  • 2002-2003 Budget