June 2014 Meeting Minutes

DAVIS FOOD COOPERATIVE, INC.

BOARD OF DIRECTORS

MEETING MINUTES

June 2, 2014

Call to Order

The regular monthly meeting was called to order at 7:01 pm at the Davis Food Co-op Teaching Kitchen, 537 G Street, Davis, California, by Stacie Hartung-Frerichs.

Roll Call:
Directors Present: Zoë Plakias (via skype), Ed Clemens, Desmond Jolly, Scott Lay, Diane Parro, Stacie Hartung-Frerichs, Brietta Oaks, Janie Booth, Bija Young

Directors Absent: none

Staff Present: Doug Walter, Beth Tausczik, Julie Cross, Laura Doyle

Guests Present: Dana Biscotti, Keiko Yoshimoto, Sandra Schickele, Ed Diggs, Marinka Swift, Italia McCarthy, April Kamen, Vince Ortiz, Lise Smidt, Ben Pearl, Dave Hart


Roles:
Facilitator: Stacie
Time Keeper: Bija
Notetaker: Laura

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).

1.2
Member-Owner comment period (Directors may also report comments from Member-Owners)

April: I read the treatment of staff task force report. I think getting direct feedback from people affected by these decisions is important. It may take a while to figure out but staff needs a venue to voice their concerns. If they are not given that, their frustration gets spread out to members.

Stacie: I hosted a thank you for Tour de Cluck volunteers at my house. Conversation turned to how vital co-op is. Nice to hear about how important the co-op is to the community.

1.6
Safe conversation with Top Leadership Team

Desmond: I have one report to make. The treatment of staff task force had a listening session with staff last week and with Beth today. I am putting this in now so thoughts from staff are reflected in the permanent record. Two things of significance for staff happened recently. We adopted the Staff End and a living wage was implemented. Staff had only a few comments about the End, but there were many comments of concern about living wage. It seemed to coincide with cuts in hours and resulted in people getting less even though there was a wage increase.

Report entered for public record:

Report to the DFC Board of Directors from the Treatment of Staff Task Force.
In keeping with its Charter, The Treatment of Staff Task Force held a Listening Session on 28th May 2014. We began by reiterating that our mandate is not operational, but policy-related. Ten staff members attended and thought a lot more would have come if the meeting were at a more convenient time, if their managers had consented, if they were not fearful of losing hours and their jobs. Nevertheless, we got a lot of input with respect to our basic questions. The two questions were: (1) How has staff received and feel about the new historic Staff End, and (2) how does staff feel about the new, equally historic Living Wage Policy? Responses are as summarized below:
Staff End. Staff is generally happy that we have a new Staff End and feel it is a big step forward though it could be more emphasized to staff.
Living Wage Policy. A couple of people voiced a positive opinion in favor of the Living Wage in concept. But there was general and widespread concern about its implementation. To wit:
- It was prematurely implemented before there was a secure way to pay for it;
- It is being paid for by cuts in the hours of those least able to afford it –lower level clerks, which mean less earnings— ( in some cases the loss of $$$ is significant)
- It has posed a serious disruption of the “family feeling” among Coop staff
- Seniority means nothing”
- With cuts in staff hours, staff members are working much, much harder. It hurts their pride because they can’t do as good a job.
- Many shoppers are leaving the Coop because they have heard of the issue (It’s hard to keep it all under wraps.)
- Promises were made or strongly implied that hours would not be cut and then seemingly revoked without warning.
- There is palpable fear of losing their economic security from retribution or just from having to pay for the Living Wage.
- Don’t know how the HR system works and fear to use it.
- The hourly wage may meet the Living Wage criteria, but without the hours to earn the wage, we are worse off,
- The lack of an employer match to 401 contributions continues to be troubling.

Respectfully submitted.
Treatment of Staff Task Force.
May 28th,2014.

Desmond: We also met with Beth to have a balanced perception about these issues. She shared with us her perspective and the board will have that report later.

Beth: I also prepared a confidential document with HR information for the closed session.

2.0
Agenda Review
2.1
Motion: Adopt Agenda

Stacie: I did receive the audit task force recommendations at the beginning of the meeting. Do we want to add this to the agenda?

Janie: Should this be something the new board deals with?

Stacie: The only thing in here new board should look at is the new audit recommendation. We can hand out the report and read it during the break so we can add it to the consent calendar. We will wait until the break to decide whether we will add this.

Ed moves to adopt agenda as amended
Scott seconds
Motion passes unanimously


4.1
GM Report to the Board

Beth: Thanks to Zoë for asking for retrospective numbers. They are very interesting to see. This shows Co-op performance over ten years. If you look at the sales per labor hour chart, you can see that early in the decade we were doing better than the average for large co-ops. In the last three years, our productivity is down due to competition and the wage freeze. The net income as a percent of sales chart is also very interesting. To maintain a healthy store, our net income should be over 1%. This shows we still have a ways to go before we are where we want to be.

Ed: On page nine you talk about the wage thaw and instituting a living wage. I am a little confused about what the living wage is?

Beth: We used the cooperative method for determining a living wage. It was developed as something that would work for co-ops by a group of consultants and co-op management. It assumes that the person will work 40 hrs. It takes a lot of information about the average cost of living in this city and then removes the cost of benefits provided by the co-op. Our living wage was determined to be $10.41.

Ed: You say it assumes these people are all getting 40 hours a week. Are all the people who qualified for the living wage increase working that much? What are your plans to guarantee they will?

Beth: My fervent hope is that the living wage will be more than $10.41 and everyone who wants to work 40 hours can. That is my goal. It may take a while to get there though.

Brie: What happened in 2006 that made personnel cost so low but net sales so much higher?

Beth: I wonder that myself. We were just getting ready for the remodel in 2006. I am wondering if they are misreporting the data.

Zoë: On the May 7th report, we did really well in sales the week of 4-13 to 4-19 what were we doing that week to increase sales?

Beth: It was Easter.

Zoë: I know you just talked through sales per labor hour. Can you talk about the spike?

Beth: That was during the renovation. We were moving in a lot of new equipment and staff was moving product out of the old coolers and then back into the new ones.

Zoë: Can you remind us what the community discount is?

Beth: The community discount is given to people with financial hardship, who are on EBT, for example.

Ed: You mentioned the relationship between frozen wages and productivity. Can you speak to that?

Beth: There are many ways to deal with competition. We decided to deal with it by keeping wages low and not looking at how we could better operate. The wage freeze and productivity are not necessarily linked, but that’s what we saw. With the thaw we are hoping to not only do something more equitable for staff, but it is making us do the hard work of looking at our operations.

Desmond: Could you do a chart without the depreciation?

Beth: Perhaps you can email me what you are asking for and I can try and get it by next week.

Stacie: I think what you are wanting to see is the EBITDA?

Desmond: Yes. Beth, do you have information about sales per labor hour from Whole Foods?

Beth: Yes, but the way they report this is very misleading. It’s a longer conversation I would be happy to have.

4.2
GM Search Task Force Update

Stacie: We screened the applicants using the matrix you approved at the May 15th meeting. There were three categories we divided the applicants into. There were those who didn’t meet the minimum requirements who we thanked and let them know they didn’t meet the requirements. Second were those not interested in the job who just wanted to sell something to us. We did not respond to this. The final candidates who met the requirements were passed along to Carolee for screening. Carolee conducted phone interviews with nine candidates. The board will look at this in closed session. I expect we will vote on who will make it into the second round of interviews tonight.

4.3
Secretary Recommendations

Zoë: There is a lot of written material for the recommendations. There are three recommendations I have made, which we should discuss and vote on. First there is a question about attendance. Should special meeting attendance count towards your three absences in one board year? I have given two options for this.

Scott: The challenge of special meetings is some of us travel a lot for work and it’s hard to schedule something that everyone can attend. What happens when a board member tries to phone in but it doesn’t work? The two special meetings I have missed have been for this reason. I would encourage you to have flexibility.

Stacie: Our current policy is quite strict on regular meetings, so I think the question is do we want to be as strict with the special meetings.

Diane: I don’t think special meetings should count because it is so rare that the time we choose works with everyone’s schedules. And you never know what can come up.

Zoë: I am not making a recommendation one way or another but I think that sounds like people are leaning towards option A.

Stacie moves to amend Administrative Policy 3. Attendance by Directors to read: i. When any Director has two absences from a regularly scheduled Board Meeting in a 12 month period, the Board Administrative Assistant will notify the Board Secretary. For the purposes of this policy, a regularly scheduled board meeting is defined as any board meeting listed on the annual board calendar as adopted at the beginning of the board year.
Diane seconds
Motion passes with Zoë, Ed, Scott, Diane, Stacie, Brietta, Janie, Bija in favor
Desmond abstaining

Zoë: Recommendation two is that we move to a digest format for the minutes beginning with the August meeting. If the board approves this, Julie, Laura and I will work to make sure everything is that legally needs to be is included.

Scott moves to adopt digest minutes
Brie seconds
Motion passes unanimously

Zoë: The third item is to adjust the policy chart to make it a little more clear what is happening with the rewrites of policies.

Ed move to adopt policy chart
Bija seconds
Motion passes unanimously

Stacie: There are still some suggestions out there. They will likely be brought up with the new board.

4.4
Proposed Board Work Plan

Stacie: I am passing around Todd’s recommendations on the work plan.

Zoë: I took your input into account when making this work plan. If anyone has questions I am happy to discuss them or I can go into some discussion of Todd’s recommendations.

Stacie: This work plan is ambitious but it takes into account a lot of what we have been discussing in the past few months.

Janie: I found Todd’s comments less useful here.

Brie: If we are not thrilled with Todd, we can switch to a different consultant.

Janie: I suggested Rose Marie Klee. I have been really impressed with her and her work with Wheatsville. Todd’s suggestions seem a little too general.

Stacie: We have not had regularly scheduled calls with Todd and we would like to try that. With my being off the board soon, I shouldn’t be lead. Someone who will be continuing on the board should join Zoë in these calls. It may be he is not being very specific because we are not being clear with him or it could just be the way he works.

Diane: I am surprised no one has comments; this is a very big work plan.

Ed: I found it very detailed and I was glad to see it. It really lays out what we have to do. There is a lot of work in next couple of years. I believe all these things are necessary. Timing is one issue but that’s to be worked out.

Desmond: I see these as recommendations for the new board. I don’t see how we can bind new board to this work plan.

Scott: In a sense I agree. There should be integration between management and the board, setting the time line as collaboration.

Janie: I think that adding high, medium and low priorities would really help. I would have loved having something like this when I came on the board. Having a lot of items without prioritizing can lead to things not getting done.

Desmond: I think you just need to put a cover letter on it and give as a recommendation to the incoming board.

Zoë: A motion doesn’t bind the new board to follow this timeline.

Stacie: The strength of a motion is that it is saying this is something we recommend.

Julie: The board may want to recommend that the new board adopts this; just as they recommend how members vote on ballot measures - there is precedent for that.

Stacie moves to recommend that new board adopts the proposed timeline
Janie seconds
Motion passes with Zoë, Ed, Diane, Stacie, Brietta, Janie, Bija in favor
Desmond and Scott abstaining

Break: 8:07- 8:20

5.2
Task Force Discussion

Stacie: What I attempted to do was gather all the task forces, their charters, leads and members and it surprised some people to see who was listed in these positions. We should look at that and some task forces are missing end dates, which they all should have. It would be good to end some task forces. I also attached some CBLD documents for reference.

Diane: So my questions are does the lead have to be a board member and how do we know who members of the task force are? How are they selected?

Stacie: They usually express interest or they are staff and it’s part of their job description, for example Doug on the Nominations and Elections Task Force. There has been some confusion. My understanding of the GM search task force was that the only members were the four board members and everyone who has been coming to the meetings was just participants.

Diane: Perhaps when we reconvene the task forces in the next board year we should be more specific outlining who is on the taskforce when we charter it.

Doug: The question is when someone wants to join does the lead have to wait to come back to the board and add them to the charter?

Stacie: What we are going to work on tonight is end dates and clarifying for the rest of this board year. Zoë, the Member Linkage Task Force is listed as ending December 2014. Is that right?

Zoë: I think it would be good to sunset this task force now, instead of in December. That way it ends at the end of the board year with the rest of the task forces.

Brie: I am not actually part of that task force, but I am listed as a member.

Stacie: Ok. Any changes to the Nominations and Elections Task Force?

Brie: I am a member of that task force.

Stacie: It is currently ending July 2014. Could we change the end date to June 30th to be more specific since the election will be over by then?

Doug: Yes.

Stacie: The Annual Meeting task force says June 2014, but really it should end upon submittal of report. I think we need to note the difference between people who do the work of the task force versus people who attend and participate.

Janie: We also need to remember that some task forces do subset of board work that can’t be shared with members in general. Not all task forces are created equal.

Desmond: I did make a call that with the meeting with Beth to restrict it to only elected board members.

Bija: The grey area is what constitutes a member vs. a participant.

Janie: We have always had very few members who have been involved. These issues have never come up before.

Stacie: We could make a note to ask Todd about best practices for member participation in task forces.

Brie: I also worry if we have had trouble with member involvement in the past I don’t want to put up barriers that will discourage members from participating.

Diane: We are not making a barrier, but if someone is a member you need to make sure you invite to the next meeting, and we have lots of people who come into the meetings whose emails I don’t have.

Zoë: Moving forward I would like to say in the charter who will be members. We should say when we charter the task force if members at large can just be part of it or just board members.

Brie: I understand we want to make more clear long term, but for now who is on the Treatment of Staff Task Force.

Desmond: It has been expanding and contracting. Me, Diane and Ed have been on it as board members, Dina was the head of the task force when she was a board member, and Ben was on it when he was board member.

Diane: We are happy to sunset this task force at the end of the month and re charter in the new board year.

Stacie: For the General Manager Task Force, do we want to sunset with end of year or when we complete the charter?

Desmond: The only task force that doesn’t sunset at the end of the board year is the audit task force.

Ed: My understanding was that even though Stacie and Janie will not be on board anymore after this month, they were staying on the task force until hiring.

Stacie: Or until a recommendation has been made.

Ed: Sunseting and re-chartering the task force is just more work. We should let it go through until we have made a decision.

Zoë: I think it is important to sunset or at least formally switch leads so the people leading the task force are on the board.

Diane: If we sunset it we will have a month without a task force and that will hopefully be the month when we would be hiring a new GM.

Stacie: Ben has asked to be a member of the task force. Tonight the board will be deciding who will be interviewed in closed session.

Ben: There has never been dispute about board members being the only ones in the room for confidential items. Being able to be involved and seeing all the materials that are not confidential is important for transparency.

Stacie: For this task force I will say we will sunset with hiring and add Ben as a member. For GM compensation will you have recommendation by the end of June?

Janie: Yes

Stacie: So GM Compensation Task force will be ending June 30th 2014. How about the Audit Task Force?

Scott: I really feel this task force should have a larger percentage of board members. Right now, it’s just me and Bija.

Dina: I always thought the purpose of a task force was to inform the board, not that the board had to have a majority of the members on the task force.

Scott: This committee has fiduciary responsibilities and only the board can make those changes.

Stacie Moves to change the end date of the Member Linkage Task Force from December 2014 to June 2014; change the end date of the Nominations and Elections Task force from July 2014 to June 30th 2014; change the end date of the Annual Meeting Task Force from June 2014 to upon “submittal of report”; add end date of Treatment of Staff Task Force as June 2014; add end time of GM Search Task Force to “completion of charter” and add Ben Pearl as a member; and add end date for GM Compensation Task Force of June 30th 2014.
Bija Seconds
Motion passes unanimously

5.3
Report from Linkage at Annual Meeting

Zoë: I am going to have to postpone this; I wasn’t table to get it ready before the packet deadline. But I wanted to thank everyone for their help with this.

5.4
Election Update, Set Date of Special Meeting

Doug: As of tonight we have 652 validated ballots so at the moment, turnout is 7.7%. It’s realistic to think we will have the usual percentage by the end of the week.

Desmond: Will you need help counting ballots?

Doug: Yes, on Monday. Anyone can come help count except board candidates.

Julie: Or anyone who lives with a board candidate.

Zoë: For the special meeting, I sent out a doodle poll with three options: June 16th, 18th or 19th. They all had six people able to attend.

Stacie: Could we move this to the closed session? That way we will be able to invite the final GM candidates to be interviewed at the same time.

5.5
Proposed July Board Meeting

Stacie: The President and Vice President of the board are terming out, so we will have a month without leadership. I suggest scheduling a July meeting of the new board.

Desmond: Would we set a date or would we wait until the new board members are chosen?

Brie: The need for this meeting is to choose president and vice president?

Stacie: Yes and also potential recommendations from the GM task force because second interviews should have happened by then.

Brie: I wouldn’t want to put pressure on new board members to attend a meeting they didn’t know about when they ran.

Julie: I think this is a good time to mention we wanted to schedule a longer time with Babak this year and splitting the new director work between the two meetings, July and August, might make sense.

Janie: Anyone running for board knows this is not a normal time for co-op. There are a lot of things that need attention right away.

6.1
Consent Calendar
Presented: Consent Calendar Items:

6.2 Motion: Accept May Minutes and May Special Meeting Minutes Laura
6.3 Info: Monitoring Chart Laura
6.4 Info: Task Force Reports (including members & termination dates) Laura
6.5 Info: Cumulative Attendance Report Laura
6.6 Info: Board calendar Laura
6.7 Info: YTD Board Budget Ed
6.8 Info: Corresponding Secretary report Zoë
6.9 Motion: Status of GM and CFO as executive officer for insurance purposes. Julie
6.10 Motion: Charter Board Orientation Task Force Diane
6.11 Info: Board Members representing the Co-op Report (events, electeds, service providers, vendors with whom you meet in the role of Director) Laura

Retained by unanimous consent:

6.2 Motion: Accept May Minutes and May Special Meeting Minutes Laura
6.3 Info: Monitoring Chart Laura
6.5 Info: Cumulative Attendance Report Laura
6.6 Info: Board calendar Laura
6.7 Info: YTD Board Budget Ed
6.8 Info: Corresponding Secretary report Zoë
6.9 Motion: Status of GM and CFO as executive officer for insurance purposes. Julie
6.11 Info: Board Members representing the Co-op Report (events, electeds, service providers, vendors with whom you meet in the role of Director) Laura


Removed by objection:

6.4 Info: Task Force Reports (including members & termination dates)
6.10 Motion: Charter Board Orientation Task Force


Stacie: I wanted to add the audit task force report to item 6.4.

Stacie moves to accept the consent calendar as amended
Scott seconds
Passed unanimously (Desmond not present)

6.4
Info: Task Force Reports (including members & termination dates)

Stacie: I pulled 6.4 because I felt the treatment of staff task force report was not a report but a recommendation to board.

Janie: Everyone on the treatment of staff task force needs to make sure this represents the task force’s feelings.

Stacie: I was confused because it didn’t seem like a report on what the task force had done in the past month.

Desmond: I received a lot of pushback against doing these listening sessions and that was our task for the month. I shouldn’t be getting calls telling me not to do it. I put it out there to be more transparent.

Diane: I also think some of the pushback was from me; I brought up some of these concerns as a member of the task force.

Desmond: But you came to these sessions in the end.

Stacie: I just didn’t feel it was a task force report so I didn’t want to vote on it as such.

Bija: I hear you are frustrated, but I don’t see here what happened at the listening sessions.

Desmond: What we passed out earlier was what came out of our first session with staff. The second one from Beth is not typed up yet.

Scott: What is role of lead? Who is writing reports? Also the Board’s job is not to get into day-to-day operations. And this is maybe getting a little close to going beyond what our responsibility is.

Stacie: I would have expected the report you passed around as your report rather than this.

Janie: It doesn’t sound like there is consensus with task force members. I would suggest we pull the task force report and substitute in the report you gave us at the beginning of the meeting.

Janie moves to substitute the treatment of staff report with the letters dated May 28th
Stacie seconds
Motion passes with Ed, Diane, Stacie, Brietta, Janie, Bija Desmond and Scott in favor
Zoë abstaining

Desmond moves to accept task force reports as amended
Ed seconds
Motion passes with Ed, Diane, Stacie, Brietta, Janie, Bija Desmond and Scott in favor
Zoë abstaining


6.10
Motion: Charter Board Orientation Task Force

Diane: I do not feel qualified to be lead on this.

Desmond: I can help.

Bija: I can help as well; I was the lead last year.

Stacie moves to charter the board orientation task force to plan for and implement training sunsetting in September with budget of $2,000. Lead: Diane. Members: Bija, Desmond
Desmond seconds
Motion passes unanimously

Next Meeting – TBD
Facilitator: TBD
Time Keeper: TBD
Recorder: Laura

Stacie moves to adjourn to closed session at 9:25 PM
Brie seconds
Passes unanimously

Break

Notice of Closed Session

A closed session of the Board was called to order by Desmond Jolly at 9:55 PM. This closed session was closed to guests pursuant to Board Policy GP6(D), which requires discussions concerning issues of a sensitive nature be held confidentially, and Policy GP(3), which states that a closed session may be allowed for discussions regarding personnel matters.

Directors Present: Stacie Hartung-Frerichs, Zoë Plakias (via Skype), Ed Clemens, Scott Lay, Brietta Oaks, Diane Parro, Desmond Jolly, Janie Booth, Bija Young

Directors Absent: None

Staff Present: Beth Tausczik

The Secretary determined that notice of the meeting was duly provided to all Directors by notice on the agenda published on May 26, 2014 as required by Bylaw Art. VIII §6(C) and Policy GP(3), and that a quorum of Directors was present under Art. VIII §6(B).

The board discussed a personnel matter.

The board discussed the special meeting date.

Scott moves to set special board meeting for Thursday, June 19 at 7 PM
Diane seconds
Passes unanimously

Beth departs at 10:20 PM.

The board discussed the GM candidate screening.

Brie moves to advance five candidates for General Manager to a second round of interviews.
Bija seconds
Passes unanimously

The meeting was adjourned by unanimous consent at 10:33 PM.

/s/ Zoë Plakias, Secretary

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