Finance Committee Meeting Minutes: May 13, 2020

Attendance: Jim Elkind, Geordie Hall, Meg Hourihan, Leigh Michl, Matthew Milan, Matt Lillard, John Skelly, Andrew Snow, John Tobin, Brian Williams.

The meeting was brought to order at 8:00 AM by Matthew Milan, MRG Treasurer and Finance Committee Chair.

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1. Approved March 2019 minutes

2. March/April 2020 Financial Reports and Cash Flow Review:
   • Balance Sheet – Received Paycheck Protection Program (PPP) loan of $190k through Northfield Savings Bank, it will need to be repaid within 2 years but at 1% interest it’s a very cheap loan. Since most of our employees are part time most of the loan will need to be repaid as it’s based on paycheck payments.  Also includes $257K in preseason sales vs $135k last year also helping our cash position. Strong position of $964k Cash, including $504k in rain day account balance.
   • P&L – Day tickets includes a big chunk of breakage with $162,000 in breakage from Mad cards which is double what is normally expect due to the Covid 19 virus cutting our season short on March 14th. There were 14 operating days vs 36 in the budget and 47 prior year for the two month period.  On the expense side, being closed saved some money on our normal operating expenses, but we did have overhead. The department managers and some staff were needed to clean the basebox, getting ready for the construction project
   • YTD P&L – February was the highest revenue operating run in recent history. So we finished February in a phenomenal position which helped with the unexpected early close to the season. Some of the departments actually beat their revenue budget for the season. Basebox came close, day tickets and seasons passes were ahead of budget, ski school and rental repair beat their budget. Even when we look at the expense side they were able to manage their expenses. NOI ($795k), ahead of budget by $150k, and last year by $114k
   • Cash Flow: very strong cash position reflected, will not need the LOC to get through the summer. Because of the PPP loan and strong cash position, we’ll be able to leave about $300,000 in the rainy day account over the summer. But will take $200K of the current $500K to bridge the gap during our summer.  The construction project has been added to the cash flow. This is a start at where the project will impact our cash flow but will be better understood over the next couple of months. It’s expected that grants from the SMF will fund most of the initial project costs through the summer, once we get into the fall SMF funding will need some support from the co op. that’s where we anticipate drawing on the construction loan for the co-op’s portion of this project.

3. Review Updated Capital Plan and Funding/Loan Strategy
   • The Construction Loan has been approved by Northfield Bank for $500k, if we spend $3.4mil on the project we will need the full amount which is a worst case scenario, it will depend on how much of the $400k contingency we need to use. Matt L worked with SMF to understand the cash flow anticipated from SMF over the next 6 months.
   • Matt presented a capital plan with $50k a year through 2026, and additional POP projects which will be based how the cash flow from SMF and the Co-op progresses yearly.
   • The construction loan was determined to be the best course of action if adverse times or other issues come up. It gives us that flexibility to have the line of credit and to still have some money in the rainy day account. This loan doesn’t have the requirement to pay it down to zero for 30 days every year which the LOC has. The construction loan is a better way to manage our debt long term.  This layers our financial loan strategy and gives us a lot of flexibility over the next several years.
   • SMF will be realizing 5% payout on the endowment which was not factored into these calculations.
   • Motion made and accepted: ‘that management be approved to take on a loan of up to $500,000 for construction and capital projects to be assessed and drawn down as needed and only as needed’.

Future Meeting agenda item

• Geordie will provide the FC with an outline of a process for SMF grant requests for funding that may not have current funds available. The grant request would be held for potential funding in the future if funds were to become available.
• 20/21 Budget – in a normal year Matt would have introduced a budget in May for approval in June. In light of all the events going on this year wrecking havoc with planning, Matt will be getting the 20/21 budget to the FC in advance of the June FC and board meetings for approval at the June Board meeting. Matt will not spend all of his or our time trying to develop a budget for every possible scenario. Everything is changing daily and it’s impossible to anticipate where things will be in the fall.  Everything will be done in the best interest of our guests and the Co-operative.

Next Finance Committee Meeting – June 17

9:01 am – Meeting adjourned

Submitted:

Deb Steines