April 2013 Approved Minutes

DAVIS FOOD COOPERATIVE, INC.
BOARD OF DIRECTORS
MEETING MINUTES

April 1, 2013

Call to Order

The regular monthly meeting was called to order at 7:04 pm at the Davis Food Co-op Teaching Kitchen Conference Room, 537 G Street, Davis, California, by Janie Booth

Roll Call:

Directors Present: Zoë Plakias, Dina Biscotti, Stacie Hartung-Frerichs, Ed Clemens, Steve Reynolds, Ben Pearl, Desmond Jolly, Travis Breckon, Bija Young, Janie Booth

Directors Absent: Bernie Goldsmith

Staff Present: Doug Walter, Julie Cross, Eric Stromberg, Beth Tausczik, Kimberly Yost

Guests Present: Brietta Oaks

Roles:
Facilitator: Janie
Time Keeper: Ed
Notetaker: Nathan

The Secretary determined that notice of the meeting was duly provided as required by Bylaw Art. VIII §6(C), and that a quorum of Directors was present under Art. VIII §6(B).

Member Comments:

Zoë: I was having a conversation with a member who had no idea that we donated to so many places; he was interested in having that be more public and having some say about where the money was going.

Doug: The Farm Aid website has a nice write up that mentions the Davis Food Co-op; someone who is a friend on Facebook reposted it and said this is why I shop at the Co -op and not Whole Foods.

The ground rules were read by Nathan.

Announcements:

Julie: You are all invited to meet with the Cool Davis Coalition for treats and talking about Cool Davis and reducing emissions.

Stacie: We got a letter from Davis Community Meals: “to Mr. Stromberg and friends to thank us for our generous gift.” I also have the three letters I presented to various assembly-persons. I have Sacramento Natural Food Coop’s preferred shares announcement. I am going to the Sacramento Natural Food Co-op board meeting tomorrow night and talking about our board policies. Their Ends are very similar to ours. I also have my pamphlet from the Yolo Food Connect meeting.

Ben: I’m going to the California Co-op conference this weekend. I’ll be speaking about Co-ops and growth.

Financial Overview:

Eric: We’ve got B4 do you want to it separately or together?

Zoë: I was wondering if you could tell us about Depreciation, EFT charges, and the Newsletter.

Kimberely: The depreciation budget was set over 12 months, but the program I have gives depreciation over number of days. At the end of the year, we’ll likely be closer to the budget, but next year we’ll budget based on number of days. The newsletter cost was timing.

Eric: If you remember, last month the newsletter was way below budget.

Kimberely: EFT is a percentage of our sales. We budgeted for an 8% loss in January, our sales weren’t that low, so our EFT charges were higher. I adjust EFT off of sales.

Eric: As a percentage of sales, it’s in line with our budget.

Steve: Payroll tax, was that just a timing thing?

Kim: We had a $5,000 or $6,000 bill from the IRS for FUTA.

Steve: What is the current portion of the real estate?

Kim: Your principle increases as your interest decreases, so I always estimate out 12 months and adjust it every quarter.

Eric: We are 2.2% down over prior year (fiscal year to date). Last week was actually 1% up. When Whole Foods first opened up we had a week that was 7% down, then we leveled off. Once we got into January, we saw 3% down more often than not. That was when Whole Foods started doing the college night. I had an interesting conversation with one of our reps. He’s a significant vendor to us and to Whole Foods. He said they aren’t doing $20,000 Wednesdays.

Ben: I have a friend who works in the fish department; he said it’s been pretty sleepy. Do we have any major marketing events that could recapture some of the buzz?

Eric: We have our annual meeting coming up.

Julie: We’re doing a dance with YCCC downtown. And there will be a cakewalk.

Eric: Our theoretical margin was quite low and we did that to be conservative.

Kim: February financials are out at the end of the week and we’ll likely be down $13,000.

Safe Conversation:

Doug: It’s also worth mentioning that marketing is looking to do stuff on the patio to get more activity going on Thursdays.

Eric: In store merchandising has been excellent.

Ben: We don’t know what Whole Foods is going to do next; do we know what we’re going to do next?

Eric: Yes. We have a very clear marketing plan.

Stacie: I wanted to get your thoughts about Cannery?

Eric: The Nugget’s people and myself are meeting with city staff next week, to see how city staff see the Cannery.

Desmond: I think it should be of concern that the way Woodland configures their growth and almost all of the shopping centers are oversold and underutilized and failing. They’ve created excess capacity; I think Davis could go down that road.

Eric: Part of the reason I mention it is this proposal has 99,000 square feet of retail.

Stacie: I don’t actually think people understand the retail space issue. Beth and I did the calculation of how much food retail space has come in since 2005.

Beth: It was a 28% growth.

Stacie: We were oversubscribed before Target came in. I think there can be a successful retail space out there.

Steve: Even though grocery stores in Woodland are having a hard time, as we speak, Walmart is building grocery.

Stacie: I’ve been reviewing all my notes from when Whole Foods came in. When we talk to other stores, people found themselves partnering with people they never thought they would. Maybe we could partner with Nugget.

Ben: Eric sent out the notice about the Associated Coop’s April meeting, if we want to do anything about our delegate of record we need to do it this meeting.

Agenda Review

Janie: I move to add 10 minutes for 7.1.5 Associated Coops.
Stacie: I’d like to cut down the GP survey review to 5 minutes.
Travis: I’d like to cut 4.4 to 5 minutes.

Janie moves to adopt the agenda as amended
Bija seconds
Passes unanimously

3.1 GP Review

Stacie: As of 6 o’clock the surveys were not yet completely filled out. I would really like those of you have not filled out the surveys to do so before tomorrow. There were one or two questions that had issues. Janie pointed out 2 and I fixed them.

Janie: I feel like I didn’t give them quite as much attention because I knew there were a lot of them, but there is so much overlap that it’s nice to see them all together.

3.2 Education Task Force

Board discusses what they want out of a food access education session.

Janie: I would like to discuss what other Co-ops are doing.

Stacie: I think we should also talk about what we’re already doing.

Steve: I’d like to see what it takes to sign people up for Cal Fresh in the store.

Julie: If Stacie talks about what she’s been doing and I talk about what I’ve been doing, that’s an hour’s worth with questions.

4.1 Election Update
Janie: Doug wrote this so I will allow him to speak on it.

Doug: We know much more than we knew on Monday last. There will be three seats that will be open and 2 alternate seats. And there are 5 candidates. Shareholders can vote for up to three candidates. I expect we’ll be pushing to get to 600 votes.

Janie: Have we ever not had that threshold met?

Doug: Since the mid ‘80s there’s never been a real issue hitting 5%.

4.2 Ends Recap
Eric: I made the corrections to the Ends and emailed them to everyone. I didn’t print out another copy. I sent you a summary of the changes.

Ben: Can you clarify the purpose of this item?

Stacie: It’s so we can accept the Ends in a public forum. If we could have a table indicating the discount types and total sales next month, that would be great. One of the things on the Sacramento report was a list of all the discounts they’ve given back to their members.

Steve: As a board member the question I want to know is if we are allocating correctly.

Stacie moves to accept the Ends report as amended
Ben seconds
Passes Unanimously

4.3 B4 - Budget and Financial Narrative 1st Quarter
Eric: I don’t like reporting non-compliance, but I’m reporting non-compliance. In the fourth quarter of last year, we had an error in the accounting of inventory left over from our truckload sale; it was overvalued. We always have small errors when counting hundreds of thousands of products. It was about $48,000 worth of error in margin dollars. We discovered the error and came up with a pretty comprehensive margin plan for retraining staff. Some of our inventory gets counted at wholesale and some at retail, and then we have to adjust. The grocery problem has been corrected. Because we have hundreds of small and large vendors, it’s not an easily computerized process.

Kim: I’m working with setting up a meeting with Briar Patch to see how they’re dealing with a lot of these complex issues.

Desmond: So Eric, your discussion just now, you were talking about two different issues: the parking lot sale and annual accounting?

Eric: Yes. They are two interrelated issues. It was coincidental timing that Beth and Kimberly were looking at procedures when an error occurred.

Dina: Did this mean that the Fantastic 40 sale was not profitable?

Eric: We tried to limit the amount of margin erosion. If we make a successful sale in the future our goal is to sell items people might normally purchase elsewhere such as Costco.

Stacie: Can you discuss how you corrected the error?

Eric: A complete review; basically auditing the department.

Beth: We’re retraining managers. They are taking a pricing seminar. They’re migrating to use the NCGA pricing tool. People had used a variety of pricing tools before. We haven’t had particularly strong check and balances.

Stacie: Do you foresee any related issues?

Eric: If our estimates in shrink are inaccurate we’ll start noticing.

Dina: I was wonder if you could contextualize this error in terms of historical errors?

Eric: It’s really atypical. This was a larger than usual number for us. It was surprising. When we saw the variance, we knew it couldn’t be theft or price increases. Finally, Kimberly discovered the spreadsheet error.

Stacie: My rough calculation is we try to keep 15 days worth of cash on hand; it looked like our cash on hand at the end of January was low.

Eric: It’s going back up now.

Stacie: Do we have any loan issues?

Eric: No.

Stacie: From a SKU standpoint, will 5% increase in price, 50%?

Beth: In a twelve-month period, 80% will change.

Eric: I would encourage you not to think that an audit is necessary because of an inventory count. If there is an error in an inventory count, it’s going to show up.

Stacie: I was thinking that if you’ve put in a lot of new procedures, an audit might be worthwhile.

Dina: The bonus that was paid to staff was that distributed across the board?

Eric: Yes, across the board. I was excluded because I can’t give myself a bonus.

Janie moves to accept B4 1st quarter report
Steve Seconds
Carries unanimously

4.4 Placeholder: Second Reading GP10 - Binding Initiatives and Boycott Policy

Travis: After discussions we’ve already had on it, I made some changes on it and Ed made some changes on it. I want to withdraw the proposal.

Zoë: If members don’t have to use the policy, why is it there?

Janie: Legally membership’s not bound by our board policies.

Doug: You are correct that the California law and our bylaws give our members the right to initiatives if they have enough voting power – a petition signed by 5% of the members. Given that every co-op has policy issues, it’s not irrelevant. The reason that there is a board policy on boycotts is that Boards in the 80s, 90s, and 00s had to deal with the issues of boycotts and wanted a procedure to follow, and the legal situation regarding the boycott of a particular product is fuzzy.

Steve: I think the policy is good because it gives a place to direct people.

Stacie: I was going to ask Julie if you could take the policy, the comments, and proposed edits and archive them.

Break at 8:21; reconvene at 8:35

5.1 Form July Training Task Force and Set Date for July Training
Stacie: I did not try to get a date set. Is anyone interested in planning or leading the training?

Zoë: I’d like to be involved.

Bija: I’d like to participate.

Janie: Would anyone consider doing two nights in July instead of a Saturday?

Stacie: This does not limit that.

Ben: When in July do the trainings take place?

Stacie: It’s usually later.

Zoë: When was that scheduled last year? When did we start planning that?

Janie: We had to wait until after the election. I think the sooner the better.

Stacie: For me, the first thing that makes my planner gets precedent.

Stacie moves to charter the task force with Zoë as the lead and Bija as a member
Janie seconds
Carries unanimously

5.2 Form BGM 4 Task Force
Stacie: This is the task force that conducts the annual review of the general manager. Essentially we compile a list of all the reports he’s accepted and present that in closed session to just the board. Is anyone willing to be on it or lead it?

Zoë: What is the timeline?

Stacie: We want it presented at the May meeting or June.

Janie: I could easily do it by June but not May.

Stacie: The reason I’ve done it in May is so there is a back up.

Ben: I’d be willing to participate, but not willing to take the lead.

Stacie: I’ll be on the task force.

Ed: I can.

Ben: I’ll participate.

Stacie moves to charter the task force with Janie as the lead and Ben, Ed, and Stacie on the task force.
Dina seconds
Carries unanimously

5.3 CCMA Attendance
Stacie: I submitted this and, since then, there’ve been a few other changes. I was asked to lead a session. Julie was asked to lead 3 sessions. We had taken an informal poll about who could go last time. I think it would be good to get a list of who can go.

Janie: I’m very interested. I have one pending thing, but would know by the end of the week.

Stacie: It feels like our sales are in line enough that we feel we could spend the money to go. How many people can we afford and for what price?

Steve: As an unbiased observer, I think it’s the best value we get for training for general knowledge. And we want to support CCMA because it’s such a valuable institution. There’s ongoing value to the Davis Food Co-op; it also helps directors who are still a glimmer in our eye.

Steve moves that we authorize up to five directors to attend CCMA
Dina seconds
Carries unanimously

Ben: A five-day per diem is pretty cushy. In light of cuts to employee compensation and benefits, I think this is a pretty fat line item.

Janie: I think with the per diem it was sort of like leveling the playing field, to make it accessible to people. On the other hand, you could look at it like “if you make the sacrifice, more people can go.”

Julie: I have spent my per diem buying food and drinks from people from other co-ops. If someone feels like they don’t need their per diem, they could certainly choose not to accept it.

Janie: Let’s just move this over to email.

Julie: Once you decide who is going, I’ll register everyone.

Consent Calendar
Presented: Consent Calendar Items:

Item: From:
6.2 Accept February Meeting Minutes Nathan
6.3 Monitoring Chart Nathan
6.4 Task Force Reports Nathan
6.5 Cumulative Attendance Report Nathan
6.6 Board calendar Nathan
6.7 Linkage update for March/April Zoë
6.8 Board Members representing the Co-op Nathan
6.9 First Reading B10 Stacie
6.10 Third Reading GP1 Zoë

Retained by unanimous consent:
6.2 Accept February Meeting Minutes Nathan
6.3 Monitoring Chart Nathan
6.4 Task Force Reports Nathan
6.5 Cumulative Attendance Report Nathan
6.6 Board calendar Nathan
6.7 Linkage update for March/April Zoë
6.9 First Reading B10 Stacie
6.10 Third Reading GP1 Zoë


Removed by objection:
6.8 Board Members representing the Co-op Nathan

Janie moves to accept consent calendar as amended
Zoë seconds
Passes unanimously

7.1.1 Board Members Representing the Co-op

Ben: It said Melissa White represented the Co-op?

Stacie: She came to our “we want you to be on the board” meeting. She expressed interest in doing something. She actually is going to go to Food Connect meetings. I’m not sure if she’ll be the representative for the board, but we talked about it.

7.1.2 Associated Co-ops

Ben discussed the history of the relationship between the Davis Food Co-op and Associated Cooperatives Incorporated and recommends that we withdraw from the organization.

Dina moves that barring advice to the contrary from counsel that we direct the General Manager to withdraw the Davis Food from Associated Cooperatives Incorporated.
Bija seconds
Motion passes unanimously

Stacie moves to direct Eric to consult with Babak and review Associated Cooperative Incorporated’s bylaws and other documents. If he determines assets are less than $15,000, Dina’s motion stands.
Janie seconds
Passes unanimously

Janie moves to adjourns to closed session at 9:36
Dina seconds
Passes unanimously


Notice of Closed Session

A special meeting of the Board was called to order by Janie Booth at 9:36 PM. This session was closed to guests pursuant to Board Policy GP6(D), which requires that discussions concerning Personnel matter be held confidentially.

Directors Present: Bija Young, Zoë Plakias, Dina Biscotti, Stacie Hartung-Frerichs, Steve Reynolds, Janie Booth, Desmond Jolly, Travis Breckon, Ben Pearl, Ed Clemens

Staff Present: Eric Stromberg

The Secretary determined that notice of the meeting was duly provided to all Directors by notice on the agenda published on March 25, 2013 as required by Bylaw Art. VIII §6(C) and Policy GP3, and that a quorum of Directors was present under Art. VIII §6(B).

Janie moves to adjourn at 9:50pm
Zoë seconds
Passes unanimously

For next month: Desmond (facilitator), Steve (timekeeper)



/s/ Zoë Plakias, Secretary

__________________________________ ______________________
Secretary, Davis Food Cooperative, Inc. Date Approved