Board of Trustees Meeting Minutes March 17, 2001





The meeting was called to order at 4:40 PM at the Basebox, at Mad River Glen Ski Area, Fayston, VT. Trustees Bleier, Coleman, Eaton, Meier, Michl, Russell, and Steines were present throughout. Trustees Kirkpatrick and Schultz came to the meeting later. Also present were Mr. Ackland and Mr. Wimble representing management, and well over a dozen owners. The Cooperatives president, Mr. Eaton presided. The minutes were kept by the Coop’s secretary, Mr. Bleier. Coop Counsel, Mr. Monte was absent.

Minutes of Past Meetings:

After discussion and upon motion duly made and seconded it was unanimously VOTED: To approve as corrected the minutes of the Jan 6th, 2001, Board of Trustees Meeting

Shareholder Comments:

Several Shareholders voiced concern over the Jan 29,2001 Memo to employees co-signed by Mr. Ackland and Board President Mr. Eaton. There ensued a lively discussion. Several of these owners voiced the opinion that the memo would stifle free speech among employees. Both Mr. Meier and Mr. Russell reminded the owners that management had a right to control employees. Mr. Bleier protested Mr. Eaton’s signing of the memo.

The board received several letters from the owners; Mrs. Anne( Hector) Griswold commented favorably on management and grooming of the mountain. Mr. Steve Skilton on the behalf of the Harwood Union High School Alpine Ski Team, thanked the ski area and staff for providing the program with an excellent training and racing site. Mr. Brian Holton commended the Ski Patrol on the care given on the mountain and the follow-up after injuring himself on the Chute. Mr. Alex Hamilton wrote that he was appreciative of the grooming of the Grand Canyon and Catamount (Bowl) trails in early March. Mr. Rick Moulton wrote re: the reforestation plan and his concern about changing the character of the five original trails. He also cited the lack of a bulletin board posting of a notice of the Jan 6th Board Meeting. Mr. George Sherwin (not an owner) congratulated the Coop on several improvements, and also inquired as to why the lift towers are not padded. Ms. Judy Kowalczyk stated that although generally satisfied with the coop’s performance, she was concerned about the lack of space in the Cricket Club during busy weekend and holiday periods. Mr. Josh Phypers was concerned about the lack of a large enough sign to mark the traverse back from Lower Antelope, and the maintenance and ventilation of the restrooms. He also offered his expertise on noise control re: the Single Chair. Young Ms. Kate Pukinskis ( age 14) commended the mountain staff on their friendly manner and personal touch. She singled out the Ski Patrol for their aid and follow up when she hurt her arm over the Christmas Holiday period. Ms. Roberta Lieberman commented favorably re; the changes at the mountain and the helpful staff. She requested that we post our Christmas hours of operation as they are limited. Mr. John Gallager commented that the Starks Nest and whole area are much improved and looking good. Mr. David Ellenbogen requested better trail signage after inadvertently skiing off the trail and running into some serious complications in the woods near the bottom of Fall Line. Ms. Judy Rune forwarded a letter from Mr. Steve Filmier with which she found herself in agreement. Mr. Filmier was concerned with the racing program hosting races at the mountain, citing several examples of the strain said races put on the facilities, and questioning the financial return of these races.

Management Report:

Bob Ackland, the General Manager had circulated a detailed written report for January and February to the trustees prior to the meeting. A copy of his report is appended to these minutes.

All departments are doing very well, with the Cricket Club, Ski School, and Rental & Repair doing especially so.

Closing plans for the Mountain were presented. After March 25th only the Single and Sunnyside Double chairs would be running. ( Lift #4 (Practice Slope) would only be run for special event racing.) These two chairs will run daily until April 15th. After April 15th the Single will run as long as there is enough snow and skier traffic (and revenue) to make it worthwhile as per Management’s closing policy.

April 7th is the date of the Annual Meeting of the Coop. There will be an owners race and barbecue. On Easter Sunday, April 15th, there will be weather permitting, an Easter service on top of Stark Mountain. The traditional Easter Parade and Easter Egg hunt will also take place.

The February Income Statement was reviewed. Highlights for the month included total income of $437,356, expenses of $245,159, resulting in an operating profit of $192,121. Management explained that bad weather with an accompanying power outage on February 10th and poor conditions and/or the perception of poor conditions for the following week had an adverse effect on revenue estimated at $130,000. Thus, income for the month was $87,633 below budget and $27,276 lower than last year. Expenses for the month were $16,441 below budget and $951 below last year, resulting in an operating profit that was $66,268 below the budget and $40,093 less than last year.

Year to Date numbers remained very encouraging. Total income is $1,546,931 which is $95,776 ahead of budget and $358,072 ahead of last year. Total expenses are 1,005449 which is $109,934. higher than budget and $195,741 higher than last year. Net operating profit thru February is $509,232 which is $5,869 below budget and $162,694 ahead of last year.

Management remained optimistic that an extremely strong 1st half of March is sure to add to an already impressive financial performance.

The treasurer, Mr. Michl, responded to a question regarding increased expenses by noting that energy and fuel costs had risen substantially over the last year, and that the lifts were operating for more total hours as well.

Mr. Ackland noted that Basebox expenses had also risen due in part to losing most of the experienced help from past years and having to train a “green” crew.

Capital Planning:

Management presented a tiered Capital Expense plan for 2001/2002 which totaled $211,530. Formula for spending this time frame equals $168,000. Management asked for approval of the sheave replacement on the Single Chair with the understanding that a revised plan would be resubmitted at the next Board Meeting. The revisions would come from an adjustment in the Maintenance (shop) building request.

Mr. Michl asked about accounting for the Groomers. Mr. Ackland informed the Board that there would be a transfer between balance sheets.

Mr. Coleman asked for an update on plans for the Maintenance Shed. Several plans are being considered incorporating different building styles and construction types. There is a need to shelter the groomers, and to provide more space for equipment storage, in addition to employee space needs. A building 40′ X 80′ with a 14′ height would work to house the groomers. A pole barn is being considered.

There also was a lengthy discussion on furniture for the Basebox regarding wooden vs. resin chairs. There seemed to be a consensus that wooden chairs best represented the “flavor” of Mad River.

Mr. Meier made, and Deb Steines seconded, and the Board voted unanimously(7- 0) to approve the Motion:

That the Board approve the funding to do the sheave work on the single Chair.

Limiting Ticket Sales Policy:

Management presented a plan to limit ticket sales to a 1200 per day maximum. Shareholders would be exempt from this ceiling. Also the Telemark Festival would be exempt from the limit. The reasoning for the limit is parking impact, lift line length, space impact in the basebox and the overall quality of the Mad River experience. There then ensued a discussion regarding lift lines vs. revenues. (Mr. Schultz became present at this time, aprox. 5:30.) Mr. Michl mentioned that lift lines must be considered in calculating revenues vs. pricing. Mr. Meier felt that the topic would still require future discussion. Mr. Coleman noted that a sales limit would impact two different ways; one with the public and one with the owners. Mr. Wimble wanted to consider the possibility of customers getting upset with not being able to get in. Also mentioned were the benefits of using the cut off as a marketing tool, and the need to keep cars off Rt. 17. Mr. Bleier spoke in favor of a “Powder Premium” pricing policy as a way to limit the crowds without impacting revenue.

Mr. Meier made and Mr. Michl seconded the motion which was voted and passed:

To approve the 1200 ticket sales limit and to further discuss and review said policy during the summer. Voting For: Mr. Coleman, Mr. Eaton, Mr. Meier, Mr. Michl, Mr. Schultz, Ms. Steines. Against: Mr. Bleier Passed 7:1

Policy on Share Redemption:

Mr. Meier made and Mr. Schultz seconded , and the Board unanimously voted to approve the motion:

That the Coop redeem any share that had been tendered for more than 6 months.

Discussion of Shareholder Rights/Entitlement:

Mr. Ackland delivered his views on Shareholder rights and entitlements. (Ms.Kirkpatrick became present during this discussion). His reading of the bylaws left him with the opinion that owners have no special entitlements aside from preferred access to services and other entitlements as determined by the Board, the reserved powers to vote on an increase in lift capacity, increased snowmaking, and an increase in excess of $300,000 in capital expenses, and access to information. He went on to express concern that some owners were placing their own wants and agendas ahead of the Coop’s. Management represents professional ski area management with all the knowledge, expertise and skills that allow it to manage the ski area within the boundaries of the policies set by the Board. He went on to say that allowing shareholders to make personal attacks on management and staff is demoralizing and the single largest negative to working at Mad River. He asked the Board for action that establishes and maintains civility, respect for individuals and support for work being done.

There then ensued a very lively and at times somewhat acrimonious discussion of shareholder rights and communications. Many opinions were expressed by both the owners and the Board. Out of this discussion the need to improve communications within the coop became apparent to all. Many expressed the need for better conduits for owners to constructively voice their opinions. Some thought a disciplinary committee might help to control owners who have gone beyond the bounds of civilized discourse. Others were concerned that the owners right of free expression should not be compromised. Everyone agreed that management should not be verbally abused or be subjected to personal attacks on line or in public. The role of the Communications Committee also was the subject of discussion. The need for the committee to take a more active role and become more productive and the Board’s responsibility to give direction to the committee was also discussed. The Board took no action on Management’s request.

Mr. Bleier, Chair of the Communications Committee, presented a survey produced by the committee to be completed by the shareholders. The purpose of the survey was to both gauge owner satisfaction levels and to find out owner priorities for the future. The upcoming owners survey was the subject of several comments. Most agreed that it looked good and would be a positive step in the right direction. The finalized survey should be completed by April 1st.

Mad River Ambulance Donation Action Item:

The Board voted unanimously to donate $5,000 to be paid out over 3 years, to the Mad River Ambulance Capital Drive.

New Business:

Mr. Michl updated the board on the status of the Stark Mountain Foundation. It is going forward on their timeline and is anticipating approval from the IRS for tax status.

Mr.Meier asked the Board if they wanted to declare a patronage rebate at the Annual Meeting. After discussion, the Board voted and passed the motion :

To table declaring a patronage rebate for future discussion. Voting for: Mr. Bleier, Mr. Coleman, Mr. Eaton, Mr. Russell, Mr. Schultz, Ms. Steines. Voting opposed : Mr. Meier and Mr. Michl.

Mr. Coleman suggested the possibility of coop education / training for all Shareholders.

The next Board Meeting is set for Saturday, April 14, 2001 at 4:30 PM .

Executive Session:

The Trustees entered executive session at 7:40 PM to discuss employee compensation. The Trustees resumed open session at 8:30 PM.

The Board unanimously approved the motion :

To approve Management’s incentive program for employees.

The Board voted and passed the following motion:

That the Board accept the recommendation of the Personnel Committee to accept the General Manager evaluation in the absence of the Chairperson of the Committee. Voting for : Mr. Coleman, Mr. Eaton, Mr. Michl, Mr. Russell, Ms. Steines. Voting opposed: Mr. Bleier. Mr.Bleier explained he opposed the motion because he had inadequate time to review and study the evaluation.

The Board passed the following motion:

To increase the General Manager’s salary by $5,000.00. Voting for: Mr. Coleman, Mr. Eaton, Mr. Meier, Mr. Michl, Mr. Russell, Ms. Steines. Abstaining : Mr. Bleier.

The meeting was adjourned at 8:35pm.

Robin “Rocky” Bleier, Secretary