Mad River Glen Coop Finance Committee Meeting March 20, 2002
Committee meeting called to order by committee chair Deb Steines at 2:30 PM via conference call.
Committee members in attendance: Roy Liu, Eric Schoenholz, and Deb Steines, Chair. Absent – Leigh Michl
Shareholders in attendance: Jed Kalkstein and Deri Meier.
MRG Staff: Jamey Wimble, Sharon Crawford, and Andrew Snow.
DISCUSSION:
Minutes of January 30th meeting were approved.
February Financials
– reviewed nothing substantial noted.
Limit Ticket Sales –
we will advise the board to hold at 1200 for 2002/2003 as there has been no significant data to indicate otherwise.
Draft Mission Statement:
here is a draft
The Mad River Co-op Finance Committee will perform a regular review of interim financial statement, forecasts, operating budgets and capital budgets for compliance with established guidelines and to ensure they comply with long-term financial plans. The committee will review long range financial plans and contribute to the Strategic Plan. The committee will review the annual auditor’s report and any corrective action if issues are identified with the Treasurer. Annual review and recommendation for renewal of the bank line of credit and tax planning to ensure that Co-op financial and accounting strategies minimize taxes.
The committee will review and investigate any special assignment as delegated by the board and will report back to the board on all activities.
Budget forecasting tool – a lengthy discussion was held by Deri to explain the tool as developed by Deri and his son Tim. The document outlining this database and its uses is attached.
Other questions/topics: none
The board will be briefed on the following topic at the next board meeting where committees’ report (could be May)
Shareholder Bonds – as discussed at January 30th meeting
Limiting ticket sales to remain at 1200
Budget Forecasting tool – Deb will ask the board via e-mail how many want to hear an explanation. If fewer than 5 will have a separate casual session.
Next Meeting –
April 4th, 4 PM, via conference call.
The meeting adjourned at 3:30 PM.
Agenda items for the next meeting:
Capital Budget for 2002/2003 (April 4th meeting)
Mission Statement (next meeting after 4/4)
Patronage Rebate administrative concerns – Deb to discuss with Peter first.
Budget forecasting tool
This document will serve to describe, in hopefully simple terms, the content and use of the budget and forecasting tool as developed by Deri and Tim Meier.
The forecasting and budgeting tool is an Excel database that has captured data for 7 years as of March 2002. This data includes a record of daily sales, classified by weather and snow conditions. Classification start with 5 being powder, sunny, perfect day, and 1 is practice slope only. Jamey has been doing the classification since day one so the determinations are consistent. This year Andrew has taken over responsibility for the database and has worked with Jamey on daily classifications.
Historic data is adjusted for price increases so comparisons are ‘apples to apples’ and not distorted for pricing. Analysis is performed to determine the percentage of days that are historically a 5 through 1 in every month.
Three primary uses of this database:
This tool is used for sales analysis. For example, if today is a 2 and it’s Wednesday, which is a weekday, the expected ticket sales will be $936. That calculation is based on the data that has been recorded and the historic number of tickets sold on a weekday if the conditions are a 2. There is a Master Matrix, which codes by day of the week, holiday and non-holiday, and snow conditions (1-5). This program factors out the influence of weather so you can compare all variables and determine when growth occurs.
Example: Say the forecast for January was for $212,000 in sales. That would be based on x number of days at a 5, and x number of days at a 4, and so on. It would calculate based on the number of ticket sales historically sold on those days, with a separate calculation for weekends and holidays. That would give you January forecast for sales based on an average year from 6 years of data. Once the month is over you compare the expected revenue based on the day of the week, given the actual weather/conditions to come up with what revenue could have been expected based on the actual weather data. That number would have calculated to $167,699 for January 2002. When compared to January actuals sales of $168,945 you can make appropriate conclusions, such as, the weather impact on sales was –21% and there was 1-percent increase due to operations.
Co-op Growth has been recorded as follows:
Years 1-3 no growth
Year 4 5 % growth
Year 5 8-9 % growth
Year 6 20 % growth (all of this growth being experienced on Weekends and holidays)
Based on the data that has been accumulating we can:
determine what impact price increases have had, (i.e. midweek increase)
……. mid-week growth
whether lower sales are a result of weather
if promotions such as ‘ski with the point’ are profitable and other promotions are evaluated against the model to determine whether they are successful and should be continued
Etc
Forecasting annual budgets on a day to day basis.
Use for annual forecasting
Other departments can index off ticket forecasts for revenue
Strategic Planning
Financial sustainability – will be able to construct a revenue model, with or without growth
The GM can then do a base expense projection based on growth assumptions
Can then determine if we can afford our long-term capital needs
