June 2013 Approved Minutes

DAVIS FOOD COOPERATIVE, INC.
BOARD OF DIRECTORS
MEETING MINUTES

June 3, 2013

Call to Order

The regular monthly meeting was called to order at 6:30 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, Stacie Hartung-Frerichs, Ed Clemens, Steve Reynolds, Desmond Jolly, Bija Young, Janie Booth (left at 8:28), Bernie Goldsmith (arrive 6:33), Dina Biscotti (arrived 6:36), Ben Pearl (arrived 7:32)

Directors Absent: Travis Breckon

Staff Present: Doug Walter, Julie Cross, Eric Stromberg,

Guests Present: Diane Parro, Scott Lay

Roles:
Facilitator: Janie/Stacie
Time Keeper: Bija
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:
Stacie: I was told yesterday that this Vine was the best one ever.

Bernie (arrives 6:33 pm)

Steve: I was speaking with a Professor Emeritus of Design who told me she was impressed with the redesign of the store.

Bernie: I got an email from the wife of the new UCD Sustainability Coordinator asking why we stock Twix.

Announcements:
Stacie: There’re a number of people going to CCMA this week. We’ll have a report out in August.

Eric: Three or four years ago Stacie and I talked to Sacramento about hosting CCMA; now they have decided they would like to co-sponsor a CCMA with us.

Stacie: I wasn’t sure from the email he wanted to host but thought he expected to be asked.

Eric: He wants to host it when they have a new store.

Dina arrives (6:36)

Stacie: It’s worth saying that we haven’t had any discussions with the board and we’d need to think long and hard about it.

Steve: How much would it cost to co-sponsor?

Stacie: When we had developed a previous budget for it, it was $10,000.

Julie: Just so no one gets blindsided by this on Moving Day, August 31st, we’re going to stay open all night.

1.5 Financial overview from Eric:
Eric: We were down 3% last week, but that time last year, we had the Food Truck Rodeo. Otherwise, as we’ll get to in the financials, the last quarter was a really good one.

Steve: We’re still averaging about 2½% down?

Eric: Yes. We’ve kept the core shoppers. In terms of our marketing plan, we’re pretty close to where we want to be. We also had a goal to keep our market share, which we have done.

Steve: Any feel for what Whole Foods’ sales are?

Eric: They’re still doing somewhere around $6 to $8 million a year.

Steve: What are our Thursdays?

Eric: It’s still the slowest day of the week, but it’s building. Nugget has a deal where you scan a QR code and get their secret coupon of the week.

Safe Conversation:
Stacie: I saw Whole Foods announce who they were donating funds to: Cal Aggie Camp. Any thoughts about donating to organizations like that?

Julie: They had three organizations and let shoppers vote.

Ed: How’s the member survey coming?

Eric: It’s wrapping up. We tried to publicize it, because people would ask, “Is this a scam?” Julie will be posting it as an online survey.

Zoë: I was wondering how the beer on the patio is going?

Eric: It’s going well.

Ed: And I’ve been drinking there.

Eric: Thursday nights Whole Foods does a 10% discount if you show your student ID.

Dina: I was talking to a couple folks on Friday – two people who work at the Energy Efficiency Center. One said she loved Julie Cross’s column in the Enterprise and would love to get it via email. The other said she’d love to get specials from the Co-op via email.

Agenda Review

Stacie: Bernie, will you offer an oral report for 5.2?
Bernie: Yes.

Stacie moves to adopt agenda as amended
Dina seconds
Motion passes unanimously

3.1 July Retreat

Zoë updates the board on the July retreat date.

4.1 Election Results
Doug: Everyone has seen the results, right? [Yes.] This is the first time in all my time at the Co-op where the number of eligible shareholders was lower than the previous year. There’s not that much to say about the election itself. I’m sure everyone saw that we will lose 3 directors to term limits over the next two years.

Desmond moves to accept the election report
Dina seconds
Passes unanimously

4.2 Audit Task Force Update
Dina: We had a great audit task force meeting on May 16th. Ed and Bija are now on the task force. Bija is a non-voting member because of her role as staff. Tracie thought we should do a systems review. Tracie contacted Campbell Taylor to see how they would do a systems audit and that would line us up well for our financial audit. Steve noted that we might want that audit to line up with when we issue member shares. I wanted to point out that we asked members of the task force if they might like to receive the financial statements that the board receives. They said that they would if they could ask questions. So, we may be relaying their questions. Steve and I will continue to serve on the audit task force for the coming year.

4.3 B4- Budgeting & Financial Condition and Budget narrative 2nd Quarter
Eric: Quarter 2: It’s a 3.2% decrease over last year. We averaged a loss of 67 people/day. When Trader Joe’s opened it was 100+/day. Six months after Trader Joe’s had opened we had gotten back to growth in customer count. With Whole Foods, we have not, but we have increased average sales. Mostly what we see at Whole Foods is college students. We saw some improvement to margin and really good expense control. That was our saving grace for the quarter.

Zoë: To what extent to do you think Open Book Management played a role in these numbers?

Eric: It made a big difference in payroll.

Stacie: I see our operating loss was much less than expected. Do you think we’ll get to zero or a profit for the full year?

Eric: There’s a good possibility. We had 1% net profit in the quarter and then we had 2% depreciation. Claire, our wine and beer operator, got a job offer at 3 times her normal rate.

Stacie moves to accept report
Steve seconds
Passes Unanimously

4.4 B2 and B3 Monitoring
Stacie: The earliest we could schedule a site visit is in December and the earliest we could schedule a staff survey is in October. I wanted to talk about the timing and see what you thought. Unless anyone is thinking otherwise, we’ll follow the longer-range plans. Since we have some time, we could research some other firms. Eric might have some ideas.

Eric: When you’re at CCMA, ask.

Steve: This is another benefit of sending members to CCMA.

Desmond: Consultants usually have a record of their clients. It shouldn’t be verboten to have contact with former clients.

Zoë: When would we want to use the results? How would that fit into the board calendar?

Stacie: Eric will be reporting on a schedule that we set, so we can set that as we see fit. One thing to talk to this firm about is that we would be able to get the results so Eric could use it for compliance reporting.

Break 7:21 pm; Reconvene 7:35

Ben Pearl arrives (7:32)

4.6 GP 4-9 – Reporting

GP4 Board Officer Roles
Bernie: We felt that returning these reports with compliance or non-compliance was a little binary because sometimes the reports feel a bit nuanced. I felt it might be more informative to return the reports with letter grades and let the board determine whether to accept that or not.

Ben: We gave this policy a B-.

Stacie: There are a number of recommendations: do you have specific recommendations for the board?

Bernie: I think we discussed setting up an understudy system.

Zoë: About the corresponding secretary role, I think that could be solved by putting some procedures in place.

Stacie: Bija, do you want to look at the administrative policies and recommend changes based on your experience this year? Maybe we can make a list of items and provide quarterly reminders (for example the president should give 48 hours after taking action).

Zoë: Why don’t we have the treasurer and corresponding secretary report each month?

Steve moves to accept the report as reporting compliance
Dina seconds
Passes Unanimously

GP5 Board Task Force Principles
Janie: There seemed to be a high level of consensus regarding compliance. It was not very controversial.

Ed: The only problem I had was that in question 3 there was language that said “however, the task force is not needed for this.” I understand it, but it sounds awkward.

Zoë: I’ll clean it up.

Stacie moves to accept GP5
Ben seconds
Passes unanimously

GP6 Director’s Code of Conduct
Steve: We reported compliance. The gist of it is being aware of conflicts and that’s a fundamental director duty. I think we do a good job of it. It only works if we continue to do education.

Ben moves to accept the report
Dina seconds
Carries unanimously

GP7 Legal Duties and Responsibilities of Individual Directors
Dina: We’re reporting compliance. This is another one the board needs to continue to take seriously.

Dina moves to accept it
Zoë seconds
Carries unanimously

GP8 Board Renewal and Continuity
Desmond: As you can see the evaluation numbers are quite favorable from all the directors. The concerns raised were not really that significant. I think someone asked for an additional training session.

Stacie moves to accept report with compliance reported
Desmond seconds
Carries unanimously

GP9 Trusteeship and Relations to Members
Dina: We used the letter grade scale and gave this a C.

Zoë: I’d like to see two separate sentences if you are going to use a letter grade: one that says you are reporting compliance or noncompliance and another with the letter grades.

Stacie: With policy governance, it’s always compliance or non-compliance. Some of the questions you brought up question policy governance and our whole governance model. I want to take to heart your comments.

Steve: As a UC Santa Cruz alum, I like the narrative evaluations. It gives the responding directors the chance to focus their efforts. I find the narrative to be much more useful than a letter grade.

Ed: As a former UC Santa Cruz faculty, who actually had to write those instead of letter grades, I prefer writing those. You can draw attention to the problem areas.

Ben: I’m not proposing we get rid of the narrative, just that we draw attention to problem areas.

Bernie: I’m really responsible for this whole letter grade thing. At the core of it, and maybe this is a training issue, but I don’t get it. All this contention about the letter grades means that someone should take me aside and explain this to me, or maybe we should reexamine this whole process and see if it can be made more efficacious. I don’t feel like I can respond to these surveys and make it sensible; it’s been my silent protest. By not submitting my responses, I don’t feel I’ve shirked my duties as a board member because I don’t see the point of this.

Zoë: Can we add an agenda item or add this to training if we want to discuss how we do policy monitoring.

Bernie: I think the great likelihood is that I just don’t get it.

Ben: We recommend an evaluation of our mediation procedure.

Stacie: Does someone want to bring a first reading?


Dina moves to accept report as compliant
Stacie seconds
Carries Unanimously

GP10 Binding Initiatives and Boycott Policy

Stacie: This one had a high level of compliance in part because we did not have a boycott submitted.

Stacie moves to accept the report
Steve seconds
Carries unanimously

Janie leaves 8:28

4.7 BGM - Reporting

BGM Global

Steve: Overall, we’ve got compliance. I will admit that I hated policy governance my first few years on the board. There’s an ongoing discipline on the board. This is a primary part of policy governance and I think we need to continue with it.

Dina: I know it took me a couple of years to understand where I could go and I think it’s useful to discuss this with new board members.

Ben: I think there’s a little bit of ambiguity around whether as a board member you can have a meaningful discussion with a staff member about operations when it’s not Eric.

Stacie: One move we made was to include Safe Conversation.

Steve: That’s a real tension with Policy Governance.


Stacie moves to accept the report
Dina seconds
Carries unanimously.

BGM1 Unity Of Control
Bija: We reported compliance. The one recommendation was to have Eric complete a survey to assess our compliance. Be mindful about email.

Stacie: We’ve discussed this before. We’ll add Eric to the survey for next year.

Dina moves to accept the report
Zoë seconds
Carries unanimously

BGM 2 Delegation to the GM
Desmond: This really continues the discussion that Steve was talking about earlier: the tension about directors wanting to know more and the policy that suggests they should know less. Should Ends be prioritized? One director asked if we should expand the Ends. Should they be made explicit as objectives that guide the institution? With regard to the tension to knowing more/knowing less: it’s inevitable. The board will want to know something. At the moment, I think it seems to be a healthy tension. We report compliance.

Desmond moves to accept the report
Steve seconds
Carries unanimously

BGM 3 Accountability of the GM
Zoë: We reported compliance. Questions 1 and 2 people were less happy about. Overall, we seem to be happy with our performance. We recommended including additional training.

Stacie moves to accept the report with compliance reported
Dina seconds
Carries unanimously

BGM 4 Monitoring GM Performance
Stacie: This was hard to monitor without having done the GM review. I kind of felt like some of the comments were more about experienced directors keeping us on task. I reported compliance for questions 1 through 4. I haven’t reported compliance for 5. I thought maybe when we’ve finished the GM review we could do a straw poll to determine whether people feel we have complied.

Stacie moves to accept the report with compliance reported
Dina seconds
Carries unanimously

Additional Comments:
Stacie: I would love to hear your comments about reporting on these policies once a year. When we had the policies reported a few at a time, people felt that they hadn’t seen enough board interaction to write a report.

Steve: I do think it’s useful to rip the band-aid off all at once; we can see how they relate to each other.

Bija: As a first year director, this was really awkward and difficult. But I think it might be easier next year.

Julie: It eliminated the problem of people not getting their reports in.

Dina: I would suggest a hybrid – maybe lumping the policies that are similar and spread reporting over the last 3 or 4 meetings.

Ben: I like doing it at the end of the year. Maybe we can review our policies near the annual meeting.

Desmond: In some ways, doing all of the policies at once put things in a larger context. I think Bernie’s concern is not a trivial one. If we had a way of capturing what the salient concerns were and making that part of the coming year it would be more meaningful. We may need another evolution to capture the level of concern and the attention it should get in the coming year. Then out of these last three months or last year, we could have an agenda for the coming year.

Bernie: I really liked doing them all at once because of the interrelation of the policies. It gave me a good picture of the whole thing. I definitely think we need to evolve the process. I think we might take a task force orientation to each policy and set guidelines required to provide feedback, and then directors go about the report the way they best see fit.

Stacie: The surveys could have been better in how they were presented. There was also this debate last year about how many questions per survey. I think it will take another holistic look. We did actually reread all of the policies at the beginning of the year, and I almost thought that was more beneficial than monitoring them. What we missed was the continuity between the reread and the monitoring. We went to this response format because people were all over the map with how they were responding. It might be worth thinking about if there is a better way to respond.

Ed: Doing the monitoring so late, we lose board members who had input on recommendations. We need to shift it some way, so we can retain that knowledge before people were gone.

Stacie: In my ideal world in September of last year we would have spent time in the retreat working on surveys or reports.

Ben: This is where I saw the letter grade helping to bridge the gap between outgoing in the spring and incoming in the fall.

Dina: This kind of falls under the definition of a thankless task; I want to thank Stacie for thinking about how to do this better.

Steve: I think that this is a measure of board effectiveness that we can wrestle with this stuff as well as we can. This is hard stuff and its core to making Policy Governance work.

Zoë: I like doing them altogether. In terms of continuity, I think this method does provide continuity. There’s room in here to get better at that even within this format.

5.1 Annual Meeting Report Out
Julie: The great thing is that by doing the same format meeting, it’s easier to do. Our cost per person went down substantially mostly due to staff cost: we got more efficient. We were really pleased from a staff perspective.

Dina: I read this and said, “kudos.” The wish to buy silverware and cloth napkins next year is a great idea.

Bernie: Did it really cost $720 to rent the Senior Center? I know the Odd Fellows lodge is something like one third of that.

Julie: The drawback of the Odd Fellows is a lack of parking.

Zoë: What we’re doing is great; I’m just kind of disappointed that we don’t get a better turn out in general.

Dina: Just an idea that popped in my head was to have a reward for bringing a friend.

Doug: It wasn’t that long ago that we tried a different model and threw a big party at the Farmer’s Market. I do think you can throw an event to get a lot of people to attend.

Julie: We can do anything anybody wants. I worked 11 days in a row the week of the Annual Meeting because there are so many events in May. We get more people at our July Member Appreciation Party. Part of it is timing. We should also think about why we want a big turnout. Do we want a huge annual meeting: why? Do we want a huge other event: why?

Stacie: We might form the annual task force earlier.

Steve: Might I suggest that people keep their ears to the ground at CCMA?

5.2 Community Giving Task Force Report
Bernie discusses the Co-op’s relationship with Twin Pines.

Consent Calendar
Presented: Consent Calendar Items:

Item: From:
6.2 Accept May 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 June/July Zoë
6.8 Board Members representing the Co-op Report Nathan
6.9 Report on April NCGA Conference Stacie
6.10 Report on Sacramento Natural Foods Co-op Board Meeting and AB1255 (Pan) testimony Stacie
6.11 Third Reading B10 - Communication and Counsel to the Board Stacie
6.12 Board Budget Update - Actuals vs. Budget Ed
6.13 First Reading B4 Ben
6.14 First Reading B9 Ben

Retained by unanimous consent:
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 June/July Zoë
6.8 Board Members representing the Co-op Report Nathan
6.9 Report on April NCGA Conference Stacie
6.10 Report on Sacramento Natural Foods Co-op Board Meeting and AB1255 (Pan) testimony Stacie
6.11 Third Reading B10 - Communication and Counsel to the Board Stacie
6.12 Board Budget Update - Actuals vs. Budget Ed
6.13 First Reading B4 Ben

Add:
6.15 Resolutions by written consent Stacie

Removed by objection:
6.2 Accept May Meeting Minutes Nathan
6.14 First Reading B9 Ben

Stacie moves to accept the consent calendar
Bija seconds
Passes unanimously

6.2 Accept May Meeting Minutes
Zoë: There was a reference to a specific department manager; we thought we could change it to just “a manager.”

Stacie moves to accept minutes as amended
Dina seconds
Carries unanimously

Notice of Closed Session

A closed session of the Board was called to order by Stacie Hartung-Frerichs at 9:40 PM. This session was closed to guests pursuant to Board Policy GP6(D), which requires that discussions concerning Personnel matters be held confidentially.

Directors Present: Bija Young, Zoë Plakias, Dina Biscotti, Stacie Hartung-Frerichs, Steve Reynolds, Desmond Jolly, Ben Pearl, Ed Clemens, Bernie Goldsmith

Stacie moved to continue personnel discussion at a special closed session prior to the close of the Board year.
Bija seconds.
Passes unanimously.

A continuation meeting was scheduled for 7:00pm June 17, 2013

The Secretary determined that notice of the meeting was duly provided to all Directors by notice on the agenda published on May 27, 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).

The meeting was unanimously adjourned at 11:07 PM.

For next meeting:
Facilitator: Bernie
Timekeeper: Ed

/s/ Zoë Plakias, secretary
__________________________________ ______________________
Secretary, Davis Food Cooperative, Inc. Date Approved