Finance Committee Meeting: June 25, 2002

Mad River Glen Coop

Finance Committee Meeting

June 25, 2002

Committee meeting called to order by committee chair Deb Steines at 3:00 PM via conference call.

Committee members in attendance: Eric Schoenholz, Mark Renson, Leigh Michl, Jed Kalkstein, and Deb Steines, Chair. Absent – Roy Liu.

Shareholders in attendance: Deri Meier

MRG Staff: Jamey Wimble, Sharon Crawford and Andrew Snow.

DISCUSSION:

Minutes of May 2nd meeting were approved. Discussed action item to request Eric write an article about the credit card fees, this will be done by Deb Steines instead. It has been suggested that articles for the Echo need to have greater involvement by committees and the general shareholder population. The committee agreed that we must not place the entire Echo on Eric’s shoulders.

May Financial Statements– reviewed, nothing substantial noted. The General Expenses noted on the income statement that were substantially over budget are insurance payments and taxes.

Review 2002/2003 proposed budget/income statement $(000):

Revenue:

·         Revenue of $2,071k is higher than last year’s budget by $18k and projected numbers by $350k.

·         Noted that day tickets were flat with 2001/02 budget but lower by $345k to projected actuals.

·         Season pass sales projected to be $35k lower due to effect of the bad season.

·         Jamey explained that day ticket budget was based on the model excluding last year. Instead of the past seven years, it was based on the first six because last year was such an abnormal year. Discussions among the committee members came to the conclusion that we should use the model and use all 7 years. This will result in $85k less in revenue. Reasoning being that the poor year of 00/01 will offset the extremely good year of 99/00.

·         The committee agreed that the model should be used completely and all seven years worth of data be included in the revenue projections. That is what the model was intended to do and we should not change it.

Expenses: Jamey walked us through the line items as follows:

·         Basebox expenses slightly higher than this years projected because they expect a normal year

·         Credit Card Charges up because expect higher revenue

·         Facilities Expense were lower than 01-02 because Jamey’s salary and his prior position were eliminated.

·         General Expenses contain actual estimates for insurance, worker’s comp, and property taxes.

·         Marketing Expenses contain expenses for share sales, Eric and Andrew and price increases for marketing. Eliminated expenses that were not considered necessary considering conditions. Also noted that we do not pay for WEB services donated by shareholders worth approximately $40k.

·         Office Administration contains a full year’s worth of expenses for staff, this year there were some vacancies.

·         Other Expenses contains potential bonuses and owner bond credit payments.

·         Service Expense contains operating expenses for racing, ski school, rental and repair, day care, environmental and summer day camp.

Discussion:

·         Increases primarily a result of fixed costs such as insurance, payroll increases, and other economic increases.

·         What possible expense reductions are possible? Jamey was requested to prepare potential reductions in services to bring Net Ordinary Income to the $200+ level based upon the lower income ($85K) as discussed above.

·         The committee feels that the Board should give Jamey an operating profit target of between $200k-225. The current income statement, adjusted for the model, will result in approximately $140 in operating profit that is unacceptable in the opinion of the committee. The board needs to come up with direction on this.

·         It was the consensus of the committee that pricing and budgets need to be done simultaneously in future years, in the April/May time frame. June is much too late.

·         In hindsight we should have looked at pricing considering the budget we are facing.

Debit Cards:

·         Jamey is looking at 2 possibilities

·         Prices of the options are coming down

Other questions/topics: none (we ran out of time)

Next Meeting – TBD, via conference call

The meeting adjourned at 4:15 PM.

Agenda items for the next meeting:

·         2002/2003 operating budget? If needed after the next board meeting

·         Debit Cards instead of Mad Money?

·         Patronage Rebate administrative concerns – Deb has Peter’s response.