Board of Trustees Meeting Minutes September 10, 2005









September 10, 2005



After due notice, a meeting of the board of trustees of the Mad River Glen Cooperative was convened at 8:00 AM on September 10, 2005 on the 3rd floor of the Basebox at Mad River Glen Ski Area in Fayston, Vermont.


Trustees Jay Appleton, Paul Finnerty, Rick Moulton, Mary Schramke, Jed Kalkstein Bill Reynolds, Steve Mackenzie were present. Deb Steines was present on the phone. Geordie Hall was present on the phone for the discussion of the SCFC. Also present was President Jamey Wimble as well as several shareholders.



Jay Appleton called the meeting to order at 8:00 AM.




Upon motion duly made by Steve Mackenzie and seconded by Jed Kalkstein, it was unanimously


VOTED: To approve the minutes of July 2, 2005.


Jay stated that the November meeting would be on November 5th.


Shareholder Comments


No comments.


Management Report


The Management report is attached for reference. We are spending a little more on advertising due to the economy and Hurricane Katrina.


Financial Report


The financial report is attached for reference. Jamey commented that we anticipate our Net Income would be around $120k which is about $100 less than budget.


Single Chair Rebuild Update


Jamey met with Tom Sanford and Jan Leonard of Doppelmayr/CTEC for an update; steel prices are going up which will affect the cost of our rebuild. Biggest concern is the cost of transport has doubled since April because of gasoline prices, which will also affect the total cost. Everything still on target and looks good. Two items we are not clear on yet, one is the variance on the chair gate opening to the front needs to be resolved, and second, environmental protection requirements for lift tower restoration work in the parking lot. The towers have lead paint, and we need to follow environmental regulations for its removal and containment. It was discussed that the state actually owns the parking lot but this has never been an issue in the past as our septic system is in the parking lot. At one time the state approached Betsy to purchase the lot but she declined. The Act 250 process is under way for the project and the application should be submitted within two weeks.


The removal of the towers might be delayed in order to move materials up the hill for the tower base construction. Helicopters will be used to take the towers to the parking lot, and then to return them to the mountain. It is anticipated that the project will be completed and load tested by Green and Gold 2006.



Committee Reports


Executive – Jay Appleton reported that the Executive Committee took action to approve the hiring of Christine Graham our consultant for the Single Fundraising. Jamey Wimble has met with her and she has spoken with Jay Appleton and the some members of the SCFC.


Finance – No action.


Facilities – Jamey Wimble reported that septic test pits on the mountain for potential house lots have not been excavated.


Homeowner Easement – Deb Steines has reclused herself from the vote as she is a homeowner and a friend of the Schoenholz.


Jamey Wimble has presented an easement request from homeowner Eric Schoenholz on Schuss Pass. The easement request was for a replacement septic disposal field located at the bottom of the Lower Antelope trail. Jamey worked on this with Peter Monte in prior years and Steve Kantor currently. The value of the land came from the Town assessment per acre value of Eric Schoenholz’s house lot and applied that to the portion of MR’s property that is affected. The basis of Eric Schoenholz land is $52,800 for 0.3 acres, thus the 0.16 affected acres for the septic is $26,400. Since an easement was requested rather than fee-simple ownership, the proposed price would be 50% of the derived value, or $13,200


The Chair reminded the Board that that this decision would set the precedent for future easement requests and to consider the vote carefully. There was much discussion surrounding the methodology and cost of the easement. .


Homeowner Bob Rogers commented on the appearance of gouging the homeowner and that the approach should be more reasonable. Upon questioning from the Chair, he suggested setting the easement price at 10% of the assessment-derived value. Shareholder Shawn Kalkstein commented that he felt this was a good compromise.


Citing conflict of interest and the Trustee Code of Conduct, Paul Finnerty requested Deb Steines refrain from further comment because she is a homeowner/trustee and a friend of the homeowner; she objected but agreed to speak as a shareholder and homeowner only.


Jay Appleton suggested we look at the formula in two sections; first we take the assessed value of the lot for the value of the easement area, and then look at the percentage allocation. A question was raised as to whether the formula adequately reflect the existing guidelines, it was agreed it did. It was agreed that the basic formula is appropriate. The percentage of 50% was then discussed; Mary Schramke voiced her disagreement with the 50% and felt it should be lower. There was much discussion surrounding the value of the land and the percentage that should be used. Geordie Hall suggested we come up with something that will stand the test of time, and should be based on appraised value, not assessed value. Paul Finnerty reflected upon his fiduciary responsibility to the Co-op. Bill Reynolds stated that the bottom line question is ‘what is the easement worth’. It was noted that the Co-op would no longer be able to place a structure on the easement area or use it for anything else other than skiing.. Bill Reynolds continued that the Board has a fiduciary responsibility to receive fair market value for all rights to property granted to others, and that he would vote based on that responsibility. Steve Mackenzie stated that the board should vote on the formula, and then if a homeowner had an issue with the calculation they could request a different decision; it was also generally agreed that the formula is a guideline and anyone who feels that it’s assessment is unfair based upon individual circumstances can ask for relief

Upon a motion by Paul Finnerty and seconded by Steve Mackenzie it was favorably voted on by Jay Appleton, Paul Finnerty, Steve Mackenzie, Jed Kalkstein Rick Moulton, and Bill Reynolds, and opposed by Ms Schramke and Geordie Hall, with Deb Steines reclusing herself from the vote,


VOTED: Approve the granting of the septic easement as memorialized in the quit claim deed Eric Schoenholz requested for the price that was determined by Jamey and Co-op council, $13,200.


Bob Rogers, speaking for the homeowners, expressed his disappointment with the price. Mary Schramke opposed the decision and requested that consideration be given to the fact that Eric Schoenholz had used Co-op property in the past for their old septic and we should look favorably on his efforts to move it off the road. Leigh Michl suggested that efforts should be made to have the grantee homeowner present at future meetings for such request decisions.


Single Chair Finance Committee Update – from Geordie Hall


Geordie Hall thanked Jamey Wimble, Eric Friedman and Sharon Crawford for their co-operation and time commitment in working with the committee; and he thanked Jay Appleton for his support and time. He alsoe alHeHe thanked the committee especially Charlie Tipper, Leigh Michl and Al Russell, everyone has been there when we needed them. Mr. Hall reported that early in their work, the Single Chair Finance Committee (SCFC) realized that the reconstruction of the Single Chair represented the opportunity to capitalize the Co-op through a national capital campaign. A successful campaign would free up the existing capital reserve fund for other projects such as replacing the Birdland chair or Basebox renovations. A successful campaign would also avoid the cost of debt financing. After a search by the SCFC, the Co-op retained Christine Graham to assess the potential and develop the capital campaign plan. The SCFC identified tax deductibility for donations is a key question, which Christine Graham will help answer.. Partnering with organizations such as the Preservation Trust of Vermont (PTV), and the Stark Mountain Foundation (SMF) are being explored. Donations directly to the Co-op might also be tax deductible. Leigh Michl commented that they are trying to anticipate problems before they occur. Charlie Tipper described the PTV his meetings with Paul Bruhn (Executive Director),,and that it has shown interest in involvement for matching grants. A research study has been funded with a matching grant with SMF and PTV, to compile historic documentation and photographs for future documents; this document can be used to solicit future donation associated with historic preservation. Rick Moulton questioned whether the PTV could be a pass through organization; Charlie Tipper commented that they were ready to discuss that with us. Leigh Michl commented on SMF involvement and tax deductibility. The SMF charter does state to preserve the single chair, the SCFC is trying to determine how the SMF can participate and to what extent. Mr. Michl is raising the questions to get answers now. Can any foundation donate to the Co-op? To what extent can SMF and others participate? Leigh Michl is having discussions with Wally Tapia, a leading accountant in Vermont for charitable organizations, to answer these questions. This is a very complicated situation, which is new, especially when the complexity of the Co-op and shareholders is considered. The possibility of donations made directly to the Co-op, marked for the preservation of the Single, as being tax deductible is being addressed by Wally Tapia for the committee. The Co-op is very close to meeting the IRS’s definition of a non-profit and this aspect is being explored. Bob Rogers, treasurer of the SMF, stated that the SMF is expecting a letter next week from Wally Tapia on how SMF or any non-profit can donate to the Single Chair after reviewing SMF charter and non-profit law. Christine Graham will be considering all aspects of this in her recommendation and will be advising the committee as soon as she has a preliminary feel for the direction the fundraising should take. Christine Graham is building a ‘giving pyramid’.


The back-up financing plan for the Single rebuild is bank debt. Mr Wimble reported that financing cost is anticipated to be 6.5% but for 6.83% we could do a long-term 20-year debt with no penalties for early payoff for a loan under $1.0 million. This would be worse case scenario. This would enable us to proceed with the Single reconstruction and pay off the basis with donations as the capital campaign proceeds. Currently the committee is recommending the Co-op proceed with a campaign for $1.54 million which includes the administrative costs to proceed with the fundraising, calculated at 10% of the campaign target of $1.4 million. .


Upon a motion by Geordie Hall and seconded by Paul Finnerty it was unanimously voted to approve,


Motion: That the Board authorize the SCFC to include in their plan an additional $140,000 for administrative costs associated with fundraising for the Single Chair.


What is termed the “retail component” of the capital campaign has been put together by by Eric Friedman. This includes such things as share sales and selling the existing single chairs. This will be launched as part of the overall capital campaign.


Christine is engaged for the planning phase only to determine what we can expect in donations and direction. Christine will be interviewing approximately 30 individuals to help with anticipating level of donations and what strings might be attached. We are hoping for a preliminary update by Green and Gold, with a full report to the Board by the November board meeting. Rick Moulton commented on timing, that he would want to target individuals prior to the end of December for tax purposes. It was also commented that the Jamey should bring the Co-op’s tax accountant into the mix. The Board will present a status report of activities at the Town Meeting in October.


Back to Committee Reports:


Board Development – Bill Reynolds and Mr. Finnerty are working on policy governing employee participation on the Board, but it is not ready for action at this time. They are discussing amending the Trustee Code of Conduct and how the board should be self-regulating; or whether we need to articulate a policy for employee-trustees or for board members that are members of another particular group.


Personnel – No action.


20th– – No action.


Shareholder Relations – Geordie is no longer co-chair on the Shareholder Relations Committee (SRC) due to his activities with SCFC. Steve Mackenzie will replace him. Mary Schramke, Chair, is exploring decentralization of committee acitvities into regional subcommittees. She suggested that NY, Boston, NJ, Connecticut, and Vermont have regional committees, working with the ski lodges to foster regional organizations. She would like to provide shareholder events for them to be involved in, and to socialize with. The goal for this year is to branch out to shareholders for more involvement; this will be investigated especially over Green and Gold. The plan would be to use the SRC to foster community. Mary Schramke will test the shareholder base to find if there is involvement interest. Rick Molton suggested they could be involved in the retail sales for the single chair, and with social events; caution must be maintained to avoid overlap with designated staff functions. A suggestion was made to have clubs host a happy hour before the board meeting.



Shareholder Comments – Shawn Kalkstein commented that the Board should continue to pursue the proper assessed value of property for the purpose of easements.


Bill Heinzerling questioned whether contractors were being lined up for the chair replacement; Jamey Wimble commented that he has two bidders. He also commented that committees should meet periodically; his comment was specifically related to the Facilities Committee. Rick Moulton commented that committees should meet when they have something to discuss. Bill Heinzerling also commented that we should all be proud of the progress made on the Single Chair.




There being no further business to come before the board, the meeting adjourned at 11:12 AM.


Respectfully submitted, Deb Steines


A true record.



ATTEST: __________________________________________

Debra Steines, Secretary