Board of Trustees Meeting: June 12, 2010
Board of Trustees Meeting
Minutes – Saturday, June 12, 2010
After due notice, a meeting of the Board of Trustees of the Mad River Glen Cooperative was convened at 8:00 a.m. on Saturday, June 12, 2010 on the third floor of the Basebox at Mad River Glen Ski Area (“MRG”) in Fayston, Vermont.
|
Trustee |
Attendance |
Trustee |
Attendance |
|
Bruns |
Present |
Lange |
Phone-in |
|
Elkind |
Phone-in |
Liu |
Phone-in |
|
Godwin |
Present |
Lesure |
Present |
|
Hall |
Present |
Stetson |
Present |
|
Jondro |
Present |
|
|
Also present were President Jamey Wimble, Sharon Crawford, Marketing Director, Eric Friedman, and three shareholders.
Call to Order
Trustee Bruns (Chair) called the meeting to order at 8:00 a.m.
Shareholder Comments
None.
Approval of Minutes
|
Motion |
Made by |
2nd by |
Aye |
Nay |
Absent |
Abstain |
|
To adopt the minutes of May 8, 2010 |
Trustee Jondro |
Trustee Hall |
9 |
0 |
0 |
|
8:03 AM Management Report
Operations:
There are two lift load tests scheduled for this summer, on Birdland and Practice slope. This is done every seven years and we do not anticipate any problems.
The late frost that hit the area did affect the mountain; maples that had already leafed out got hit and lost their leaves. However, they have recovered and seem to be fine. President Wimble spoke with our forester and he feels confident that as long as they re-leafed, they will be fine.
We are still researching some trail stabilizing methods for Paradise. A fairly significant slide happened last fall near the top of the trail. This may end up being another volunteer project to help bring hay bales into the site.
Capital:
The Basebox siding repair is more involved than anticipated. Much rot was found once exposed. The office building also took more siding than anticipated.
We may also be moving the office shoring project scheduled for next summer to this summer. When the engineer re-inspected the building this spring, he believed that we should move the project up. We are in the process of finalizing bids and getting permits for working over the stream. This project will most likely be $100,000 – $125,000 to fix. We have been planning on the project and have put money aside for it, therefore it should be affordable.
Due to the possibility of the office fix this year we have put a hold on capital projects not yet done or started. We have committed to about $48,000 of the original $110,000 approved in March.
Share Sales:
We sold one share for the month of May against a target of one. We have sold twenty shares this fiscal year to date against a target of twenty-nine. The target for the year is forty. There are just four shares on the tender list for this fiscal year.
Financials:
May came in ahead of budget. However, some May expenses may show up in June. Projected net operating income (NOI) for September 30, 2010 is about $144,000. There is $627,000 of cash on hand. We also just received a check from PTV for the Single to bring the maintenance fund up to $53,000.
Trustee Lange asked how much more money in pledges was expected; President Wimble replied that if all pledges come in, there should be over $100,000 in the maintenance fund. Trustee Hall clarified that all funds must stay in that fund; they cannot move to capex or other areas.
8:30 AM Office infrastructure and capex/reserve discussion (Action)
There is approximately $35,000 remaining for this summer’s expenditures. We need to do the $100-$125K office I-beam work, for which we’ve already earmarked $100K. President Wimble has asked for the ability to spend that reserve to get that work done this year. Trustee Hall asked for an explanation of NOI vs. capex. Trustee Bruns and President Wimble explained that the “rainy day fund” is cash, not related to NOI; the $100K is already set aside and is not part of NOI either. He also asked whether we have a negative cash flow for September. This is confirmed, but pre-season sales will offset this. Question: how do Mad Cards (MC’s) affect cash? Trustee Liu wanted to review how breakage is calculated; his position was that cash should not be affected at all by MC breakage.
SHQ: How are MC sales classified? Answer: they’re taken as income when redeemed.
Trustee Hall asked how share sales counted as well. Trustee Bruns stated that we budget a gain of 20 shares per year.
We will end the FY at ($80K) (or ($5K) if we don’t allocate to rainy day fund). We’ve approved $48K for remainder of summer spending and 100K in reserve. President Wimble has asked us to release the $100K for office shore-up.
Trustee Hall asked us to look at the items that are not to be done and look at their ROI.
The following items would be deferred:
· track belts for snowcats
· reframing of fireplace room windows
· ski rack system for rental/repair (discussion ensued about safety concerns)
· Basebox entry
· e-commerce
President Wimble noted that we don’t know the ROI on e-commerce or the Basebox entry. Trustee Hall asked if rental/repair ski rack would pay for itself due to additional rental skis that could go out. There would probably not be many additional pairs going out; they would just have storage space for the ones that are all over the rental/repair room right now.
Discussion ensued between Trustee Bruns and Trustee Hall r.e. ROI and summer spending and governance. It was agreed that this topic would be further explored when the Board discusses financial sustainability.
|
Motion |
Made by |
2nd by |
Aye |
Nay |
Absent |
|
To approve the release of the $100K set aside for the purpose of the office shoring project. |
Trustee Lange |
Trustee Lesure |
9 |
0 |
0 |
8:58 AM Discuss 2010-2011 season pricing and budget (Action)
|
Motion |
Made by |
2nd by |
Aye |
Nay |
Absent |
|
To accept the Finance Committee’s recommendation for pricing for the ‘10-‘11 season. |
Trustee Lange |
Trustee Elkind |
8 |
Trustee Lesure |
0 |
In his dissent, Trustee Lesure expressed concern about raising prices on the weekends, which affects out-of-staters more than locals, and he wants to continue to look at other revenue streams. He disliked that we have to hope for breakage on MC’s in order to gain more income in the spring.
Trustee Hall agreed that we need to aggressively pursue other revenues but in response to Trustee hall’s question, President Wimble also noted that just that $3 raise (on weekend day tickets) would increase projected revenue by $91K. Trustee Lesure asked when the last time was that we didn’t raise prices; Marketing Director Friedman replied that it was only two or three seasons ago. Mr. Friedman went on to comment that if one looked at the profit history of our other departments, almost all except the Cricket Club have been trending upward; we’re doing well in terms of eking money out of other departments when snow is lean. He noted that we have to start investing in infrastructure so much more in coming years that the profit margin is not going to get bigger. He doesn’t like the idea of raising prices any more than any other marketing director would, but he doesn’t see any way to avoid it. During holiday times, when conditions are good, people don’t care how much it costs. He advocates taking care of our loyal core: season pass holders, Mad Card holders, and locals. He closed with: “If you’re going to cherry-pick our conditions, pay the holiday rate!”
Trustee Lesure wanted to know how many kids passes we gave away (as part of FMC’s, adult season pass sales, or SH kids) in prior years .
Teen pass numbers are up – this is great considering we don’t have snowboarding.
VT skier days were up 1.2% last year as per Trustee Hall. Marketing Director Friedman advocated for getting kids skiing as much as possible as there is an industry-wide problem of skier numbers dropping. Trustee Jondro noted that this points to a need to add capacity to our kids programs.
Trustee Stetson posited that we may be making too many short-term decisions and making sustainability difficult. Trustee Bruns noted that a sustainability discussion is slated for July.
Budget:
President Wimble summarized the incentive program. Trustee Liu noted that the FC did not make a recommendation regarding the incentive program because it had not been presented to the FC. Trustee Bruns asked for a brief discussion in order to bring the Treasurer up to speed. Trustee Liu said that the points seemed reasonable and the percentages also seemed “relatively pragmatic and rational.” He recommended approval unless there were major concerns.
Trustee Hall had a lot of questions about it but didn’t want to bog down the meeting; he recommended passing a budget with a caveat regarding the allocation.
There was a brief discussion of the incentive program with Trustee Hall feeling that it did not really provide incentives and Trustee Stetson commenting that since we have not achieved that level of NOI very often, that the plan seemed hollow.
Liz, what was the action out of this. Was Fin Comm going to review it and make a recommendation? (LB: This was my understanding)
nbsp;
|
Motion |
Made by |
2nd by |
Aye |
Nay |
Absent |
|
To accept the budget recommendation for ’10-’11. |
Trustee Lange |
Trustee Jondro |
9 |
0 |
0 |
10:30 AM Committee & Project Reports
Finance (Trustee Liu)
The FC had no items or concerns that had not been addressed already in the meeting.
Trustees Liu and Elkind reviewed a discussion and recommendation from the Finance Committee that Jamey and his team develop a business plan to increase profit from the General Store by 50%. The intent of the Finance Committee’s recommendation was to develop a better understanding of the investment (people, space, marketing web, etc.), effort, approach, risks, and timeframe that would be required to achieve this goal so that the Board and the management team could evaluate its feasibility and ROI. The genesis of the recommendation was that we have a great brand and it makes sense to increase profits using ways that are not snow-dependent. This ties into the sustainability discussion in July.
Betsy Jondro, speaking as an employee, noted that two constraints are space and snowfall. Website presents an opportunity to reduce the effect of the latter. There is also opportunity in marketing – building a web presence and perhaps doing direct mailings. Betsy Jondro also indicated that we would need to grow the retail space to achieve greater profits, The challenge is to present needs, cost, and potential ROI to the Board, not necessarily the nitty-gritty of merchandising, marketing, etc. The increases that the store is projecting for ’10-’11 are mostly for the web-based side of things. Discussion ensued about details. Trustee Bruns recommended discussing sustainability in general, with the retail store being just one part of that, vs. having a four-hour discussion about retail. Trustee Elkind related that the Finance Committee recommended developing the plan for just the General Store as an extremely valuable exercise and a starting point that would not preclude examining other opportunities.
Trustee Jondro (speaking as a Trustee) advocated discussing a Board retreat after our July meeting. SH Bob Ackland noted that a strategic planning session is vital so that decisions can be made based on values and goals and not just on short-term financial numbers. Trustee Bruns pointed out that it would be good for the Board to see Marketing Director Friedman’s marketing plan and hear from him about how it is created. He thinks this would be good to do in July.
Volunteerism (Trustee Lesure)
Today is the first volunteer work day; unfortunately it’s pouring rain. [Trustee Lesure takes a short break to speak with assembled volunteers.]
Green/Sustainability (Trustee Elkind)
Trustee Elkind has researched a particular grant for heating with sustainable materials. It would require matching donations from the company seeking the grant; it’s not a freebie. The grant in question is good for one year; we could apply for it and take a year to decide how to use it. Trustee Jondro asked if it was an annual repeating grant.
We could apply in August to do a feasibility study, then apply for an implementation grant in January. Trustee Bruns asked for a ballpark figure on how much money the study would require. President Wimble spoke with someone (also a SH) at Sun Wood systems; if we did the Basebox and maintenance shed separately, there would not be a good ROI. The best way is to tie the whole facility into the system. Grants for equipment are difficult to get; while he wanted to sell us a system, he thought the ROI “would not be that great.” He recommended a feasibility study first. Trustee Stetson noted that year-round steady loads are the ones that get a good ROI.
NHR (Trustee Bruns)
Trustees Stetson and Bruns met with Bill Reynolds, Britta Fenniman, Professor Bob McCullough, and Jamey on June 10th.
There are several steps associated with preparing the application draft:
1. Historic boundary, facility, and culture research
2. Have Prof. McCullough’s UVM class prepare a draft application
3. MRG Board review of the draft application
4. Draft goes to VT Dept of Historic Preservation
5. Application is modified/corrected by the UVM class for final cleanup
6. Final application submitted to VT State Advisory Council (SAC) for Historic Preservation (SAC)
7. If approved by SAC, forwarded to the National Park Service (NPS) for review
Trustee Stetson hopes that by the end of the calendar year we will have the draft step done; the whole process could take 18-24 months.
Current research now is into the architect, the architecture, size of district, and contributing vs. non-contributing structures. We will probably err on the side of a small district boundary with the knowledge that it could be expanded later. This would exclude the 50+ private properties surrounding the area. We can also check in informally with the SAC to get feedback on our application process. They have been a very big help in this process. Tom Visser, a historic buildings expert, has another UVM class and they will be doing a building analysis of some of our structures. Trustee Hall asked if we had any projected expenditures; President Wimble said it will be about $4K total including application fees, photography, etc.. SMF have granted us $2K to this effort. Trustee Bruns noted that SMF have offered potential of more funding help if we have increased costs.
SHQ: (Lu Putnam) asked President Wimble if the Basebox paint can be less blue and more grey. He noted that the paint is pre-mixed but it would cost extra money. Trustee Bruns asked President Wimble to work with her regarding the question.
Board Development (Trustee Lange)
He will meet with Deb Steines and Trustee Jondro before our next meeting so that by the July meeting he will have something to report. He asked that if anyone had recommendations of individuals who should be approached regarding running for the Board, to please let him know.
Facilities (Trustee Stetson)
Trustee Stetson had nothing to report but has many questions.
11:00 New Business
Expectations for July Sustainability Discussion: Trustee Hall
Trustee Hall plans to circulate a draft of his presentation ahead of time. Trustee Bruns asked how long of a meeting the Board would prefer for July given important topics requiring discussion including but not limited to financial sustainability, incentive program, and usual committee reports. The Board preferred staying with a three hour meeting followed by executive session.
11:05 AM Action Item Review (Liz)
|
Action Item (Responsible Party) |
Progress |
|
Retain an engineer to re-inspect the beams under the office and issue an opinion letter (President Wimble) |
The opinion letter includes two years; an engineer will be coming as soon as the water level of the creek goes down a bit. President Wimble should be meeting with him next week. In process. That meeting occurred, final bids pending. |
|
Once volunteer effort is a bit more organized, resurrect Volunteers page on Coop web site (President Wimble) |
Will happen in May. In process. Still in process. |
|
Revise heating energy metrics and distribute to Green Committee (Trustee Elkind) |
In process. Delete item: we don’t have statistically significant results to create reliable metrics. |
|
Re-evaluate and revamp process for election procedure. (Trustee Lange) |
Trustee Lange volunteered to head the Board Development Committee. The July Board meeting will be the best time to talk about it. In process. Trustee Jondro noted that July is quite full; September will be just fine for that but it can’t wait. |
|
Adjust CoopBoard@Madriverglen.com so that it goes only to board members without a moderator. (President Wimble) |
Completed. Revisit. Moderation will go away as part of permanent fix that is occurring by Sept. 1. |
|
Make recommendation to Finance Committee for employee bonus program to be in place before the start of the 2010/11 season (President Wimble/Trustee Liu) |
This will be discussed during the FC meeting during the last week of May. In process. Delete. |
|
Clarify what surveys need to be done of SH’s and day skiers, by whom, and how. (Trustee Jondro, Trustee Godwin) |
In process. Still in process. |
|
Draft a timeline for NHR process. (Trustee Stetson, Trustee Bruns) |
Done. |
|
Talk with Jamey r.e. breakage (Trustee Liu) |
New item. |
|
Set up a conference call tutorial on financial reporting, specifically cash flow. (Trustee Liu, President Wimble) |
New item. |
|
Start an email discussion regarding the employee incentive program (Trustee Liu) |
New item. |
|
Float some calendar dates to Board members for a possible retreat (Trustee Bruns) |
New item. |
|
Interface regarding feasibility studies for green improvements w.r.t. heating (Trustee Stetson and Trustee Elkind) |
New item. |
11:20 AM The Board entered Executive Session
11:26 AM The Board returned from Executive Session
11:27 AM Adjourn
Adjournment
|
Motion |
Made by |
2nd by |
Aye |
Nay |
Absent |
|
To adjourn. |
Trustee Jondro |
Trustee Lesure |
9 |
0 |
0 |
