May 2014 Approved Minutes




May 5th, 2014

Call to Order

The regular monthly meeting was called to order at 7:00 pm at the Davis Food Co-op Teaching Kitchen, 537 G Street, Davis, California, by Ed Clemens.

Roll Call:
Directors Present: Zoë Plakias, Ed Clemens, Desmond Jolly, Scott Lay, Diane Parro, Janie Booth, Bija Young, Stacie Hartung-Frerichs (arrived at 7:05)

Directors Absent: Brietta Oaks

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

Guests Present: Paula Gilbertson, Ed Diggs, Angie Evans, Jim Pavlechek, Darcy Young, Sandra Schickele, Reuben Arevalo, Vince Ortiz, Ben Pearl, April Kamen, Lise Smidt, Gretchen Muller

Facilitator: Ed
Time Keeper: Zoë
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).

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

Vince: At the last board meeting there was discussion about going over budget on a few items. I just was wondering what those items were and if you sent out an email about it?

Beth: I didn’t understand I needed to respond to financials during the safe conversation, so I did send it to the board after the meeting. If you want, I can send it to anyone else interested.

Vince: Also I noticed the ballot box is moved from its previous location this year. What is the reason for this?

Beth: The security cameras are not as good in front where it was before. It also obstructed sales.

Scott: I am not running for reelection, but I wanted to say I am so proud of the work this board has been doing and will continue to do. I will still be a loyal shopper and member of the Co-op; I just don’t have the time to dedicate as a board member.

Ed Diggs: I would like to thank the employee task force because I think you have made lots of good ends changes.

Ben: I read the version of treatment of treatment of staff policy and I really liked previous item of educating staff about the cooperative model. I think it was very important.

April: I second Ben’s comment.

Stacie: We will discuss that at the agenda item.

Announcements - Board business only, please

Julie: The Annual Meeting is Sunday, May 18th. If you are not staff working the event, please register online so we have enough food for you. Also if any board members would like to volunteer at the meeting, please let me know.

Safe conversation with Top Leadership Team

Beth: Ed emailed me some questions about financials and I have answers. I need to own a mistake on the discount table. Ed caught it and the amount of the discount given to seniors was off by $100,000. I printed out a corrected copy, but I can’t find it at the moment.

Stacie: Since that is on the GM report to the board, we can cover it then.

Beth: Another question Ed had was that the way personnel costs were stated was confusing. Here we have listed the total personnel costs and below that direct labor total. Personnel costs include benefits, PTO, ETO and Workers’ Compensation. If you add all those things together with direct labor, that is personnel costs. Does that make sense?

Ed: Yes.

Beth: In regard to profitability, the money that was paid in severance does affect profitability numbers. For the quarter, if we exclude the severance pay, the store did a lot better than expected.

Ed: I just wanted to make sure that this is a onetime thing.

Beth: There are some outstanding payments to the outgoing GM that will appear on the financial for next quarter as well.

Scott: But they are not unforeseen.

Beth: No, they are what you as a board agreed on in the severance package.

Beth: In the profit summary report the question was asked: should every department come out to be profitable? When we make that report we take all overhead expenses and distribute them equitably over all departments. For example, the deli uses a lot of supplies and uses more space and refrigeration. Same with produce – it uses more refrigeration then grocery and has a smaller margin. So running produce and showing profitability is very difficult.

Scott: Is the deviance here normal in co-op world?

Beth: I think so.

Ed: I do recognize there are some departments that are hard to show profit for.

Janie: I think it’s useful mostly as a directional tool.

Scott: It is also important to think of some of these departments as draws to the store and not just as profitability.

Beth: Yes. For years our meat department was a draw but it was very difficult to make a profit. It is an important report to run.

Agenda Review

Ed: Any changes we would like to make here?

Stacie: We want to take one piece in closed session. Would the board like to move to a closed session now to discuss what should be in the closed session or just add a closed at the end to discuss the wage proposal?

Diane: I think moving the wage discussion to a closed session and discussing the Assessment at item 4.1 would be fine.

Stacie: So just to clarify, we are going to spend 50 minutes on item 4.1 as Davis Food Co-op Assessment and a 25 minute item 7.1 on the Wage Proposal in Closed Session.

Scott: I just want to say to our guests that it is difficult to move these things to closed session and we are all trying to do what is best for the Co-op and the staff.

Motion: Adopt Agenda

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

Review and Discussion of Davis Food Co-op Assessment

Beth: I wanted to thank Paula and NCGA for their support for last 2 months. We have been going through everything to see how to be better as a co-op and as a business. It’s good to get perspective from someone on the outside. We may not do everything in the assessment and we will have to implement some of it slowly, over up to 24 months. I know there is something in here that touches everyone, so I open it for questions and comments.

Paula: Let me give you some background. This is a handout about NCGA. It is a co-op of co-ops and the Davis Food Co-op is a founding member. We are here to serve you. We do lots of behind-the-scenes training and assistance with our member co-ops. I have been really happy to come out and help you. I met a lot of you when I visited in March. My background is working with co-ops since the 80s. I have been with NCGA for six years and have helped many co-ops, many of them in transition.
You have an organization with a long, rich history. The market and climate around you have changed but you have not adapted to those changes. I am here to help you see those things and help you get a little more caught up. This will help you become a more sustainable business in the future. My recommendations are about what you need to work on because your cornerstones are a little misaligned and in disarray. You have some legacy issues and also problems with entitlement, serving select groups of consumers more than others. You have an opportunity to make this work without struggling under the layers of administrative hurdles you have put up. These are just my assessments. You know your community better then I do so it is up to you to decide which of these are the highest priorities and what maybe won’t work for you.

Stacie: Beth, can you talk about what has been done in the store already?

Beth: I wanted to make sure that the report came out to you, the board, and management team at the same time. The management team met and talked confidentially about the report this morning.

Stacie: When I read report I thought it could really be broken down into three big buckets. There were items that were focused on operational, board, and member linkage. I think we should look first at the items that we as a board can affect and then look at the member linkage suggestions and leave operations until the end if we have time to discuss them.

Janie: I think that’s a good approach but as a board, we should focus on what we can directly affect. I also wanted to say it’s heartening to read this because although there is a lot of work to do, it’s work we can do, and there are solutions.

Desmond: You mentioned the marketing environment has changed. We have had a philosophical issue in the past of whether we are competing with other stores in Davis or other co-ops.

Paula: You are competing with anyone selling groceries.

Beth: We don’t own anything in the marketplace. There is no question about that.

Desmond: There has been over the years.

Stacie: There were a number of bylaw changes mentioned. This is a bylaw rewrite, not just simple changes. What were your thoughts on this?

Paula: For an organization that is member-owned, I think you have put too much member control in operations and I think this has tied management’s hands to make changes. The suggestion is to remove operational detail from policies and give the GM framing. Bylaws being so specific is confining because it ties your hands. The majority needed to get a change in bylaws is pretty high. Clarity on who the board is and whom you are responsible to is important.

Scott: We have lacked that but there are other models we can look to as an ideal.

Paula: For me, the most important part of member interaction is as a consumer.

Beth: I have been able to interact with other co-op GMs and talk about taking on a model with more flexible bylaws. I am getting education materials from other coops that have undergone similar changes.

Desmond: What is the percentage of voters needed to change the bylaws?

Stacie: Two thirds.

Paula: Usually memberworker and superworker discounts are not written into policies. The senior discount is a marketing issue and also shouldn’t be in the bylaws. It’s not based on income but just on age. It doesn’t sit well as a value issue. You are doing a lot of good charity work in the community but these actions are hidden in the ends. Seward, for example, has a score card saying what they are doing for the community. There is very little of this in your store. Our competitors are getting better at this; we need to work on telling our story.

Janie: I know we need to focus on bylaws. But how can we help management implement changes?

Paula: By looking at policies and articulating what your vision is in a forward-looking way.

Zoë: We have been working with Todd [Wallace from CDS] on our policies as well. You mentioned detail. Are they too detailed? Is it truly empowering if we have policies with items A-Z?

Paula: It depends on how well you are able to articulate your vision. The goal is to have board policies with a large framework management can use to bring you those ends.

Zoë: I am hearing it is a balance.

Ed: I was wondering if you have looked at how we are monitoring these policies and if you have any suggestions.

Paula: I am not as familiar with that, but I can work with you when you are ready to proceed. Maybe we will have that opportunity in the future. The board needs to have a certain amount of education because you are working with a grocery store, a business and a coop.

Stacie: Should we move on to items that affect members?

Janie: It is important to think about whom are we serving. Do we focus on very active members already opting in or members not as involved but who we would like to encourage to be more involved? Currently we are slanted more to more active members.

Desmond: Many of the members I talk to say the coop is great – why did you have to make this change? The question is, do we share the reality? How much do we share? Are we shielding them? How much should they know?

Beth: It’s hard to invite people to a sad party but there is balancing we need to do. It’s not good marketing to say: “we are struggling; come shop here.” But we do need to be transparent.

Desmond: I usually tell them the co-op needs you.

Diane: It was very sobering to read this. I read it a bunch of times. I really appreciate it because I want to be a part of this organization and it is good to know there are concrete things we can do to effect change. It seems to me as a new board member there were a lot of things sugarcoated by previous management.

Stacie: I kept having this gut feeling as I read this in reaction to some of the suggested changes. But I kept coming back to the fact that if that means our store can do more for more people it’s worth making these changes. Janie pointed out to me that many things on this list are suggestions and if we try something and it doesn’t work, it doest have to be a permanent change.

Janie: NCGA has a vested interest in us succeeding. The recommendations reflect that.

Beth: It is different than hiring a paid consultant; NCGA is with us for the long haul.

Paula: Anything I can do to say that I am helping is important, that is my job. We operate in the same cooperative atmosphere as you do.

Scott: I wanted to say thank you. We are not a board saying we have to go in a different direction. Yes, we may need to change certain bylaws, but there is not a strong shift in direction. I think it’s important that you know that and that the staff members that are here know that. A lot of the media surrounding the transition has implied that.

Zoë: We have agenda item about the retreat and some of the policy items will be talked about there. Beth what is your process of going through this report?

Beth: The management team will meet again on Thursday and we will start prioritizing what is the most important and what we can’t manage right now. We have worked a lot with the managers in Admin and those changes will roll out in the next few weeks. We are going to work through this as a team.

Desmond: Are there some things we should wait until we have new GM to implement?

Beth: I promised I would not be making big changes in the store when I took on this roll. But as I learned more, I realized I couldn’t do that in good conscience. My goal is that if I hand off the job it will be in a better shape then when I got it. My priority has been the wage thaw and hiring an HR consultant.

Stacie: I do think the board should take away a timeline from this, a plan to rework the bylaws and policies. We will discuss this more during the retreat item.

GM Report to the Board

Beth: I am passing around the corrected version of the financials that I mentioned earlier.

Janie: We have to realize that these numbers are not inflation adjusted. So the decreases are a bit more.

Scott: Inflation is only about 1%.

Janie: For food costs it is a bit higher.

Beth: I have some graphs I could send you that chart our financials for the past 10 years.

Janie: That would be great.

Scott: We also need to look at the industry trends I think.

Stacie: Let’s make that an agenda item for June

Ed: In general, how are the TomatoCasts working out? Are people are participating and is it helping margin?

Beth: We are undergoing a revitalization of TomatoCast right now. We are adding departmental casts, which will move to Tuesdays so we can report on those casts at the whole store cast Wednesday. We are also deciding what we want the whole store cast to look like. For now it is still falling short.

Bija: Our department has been running a cast for over a year and it really is improving our department.

Beth: Other departments are still figuring out how to make it work. We were told it would likely take 24 months for us to start seeing the benefits. But we have different impediments now as well.

Desmond: I went to a TomatoCast a few weeks ago and I was very impressed. There was good team building and that is a very important aspect.

GM Search Task Force Update

Stacie: We have been meeting nearly every Friday. There were a few that we had to cancel due to scheduling conflicts. We posted the job ad right after the last meeting and have been receiving applications. Right now the biggest focus, other than screening, is reaching out to people in the co-op world who we know. We will want to have a special board meeting to accept the screening criteria. The general process is the initial screening will be phone interviews conducted by the task force and Carolee. Then we will bring candidates to the board for final screening. We are also looking at GM compensation and we would like to create a task force of just directors to discuss compensation. Would anyone like to be on that task force? It would be the end of May beginning of June.
(Desmond and Diane raise their hands)

Stacie moves to Charter a new GM Compensation Task Force with Janie as lead and Desmond and Diane as members
Scott seconds
Motion passes unanimously

Stacie: I will send out an email scheduling that meeting.

GP Policy Monitoring

Stacie: I am taking a stab at a new monitoring format. I reported compliance for all. I had some suggestions. Some policies’ criteria for compliance were too detailed. For example, in GP9, we didn’t have a focus group last year or poll key shoppers but we had a number of member linkage events so I reported compliance.

Janie: You mention that CBLD had no policy for Policy GP 9 [Trusteeship and Relations to Members]?

Zoë: Yes. It may not the right fit for us to have no policy, but we should maybe think about how specific it needs to be. How important is it that we have focus groups and poll key shoppers? In terms of format, I really liked this monitoring report. Is it doable in the future?

Stacie: I think it is doable. I hesitated to volunteer for this because I have so much as president. But I think it is doable.

Diane: I thought that this was a great format; thanks for taking the time. We all have to be as structured as this in the future monitoring reports.

Stacie: That was my one concern, some people are going to be longer winded then this, and some will be even more concise. I felt this was a good middle ground.

Janie: Going back to the policies, I think it’s important that everything we do as a board is to move the organization forward.

Zoë: We need to make sure policies are reflecting our vision.

Scott: I think there is too much time spent reviewing policy governance over strategic decisions right now.

Stacie: I had to resist giving my own opinions, not just reporting.

Scott moves to accept monitoring reports for Governance Policies 6-10
Zoë seconds
Motion passes unanimously

B2 Treatment of Staff Second Reading

Desmond: I wanted to go back over some history. In 2012 we chartered the first Treatment of Staff task force. That task force recommended the staff survey and an external HR audit. This year we asked to re-charter the task force and we have now done a B2 update. The concern for and appreciation of staff is unanimous on this board and every vote we have made on these issues has been unanimous.

Diane: I know it looks very long. We presented some of this last month and were asked to report back after looking at other co-ops’ policies and the CBLD templates. CBLD has a template which is three quarters of a page. It is used by a number of co-ops. But there is such an overriding need for commitment to staff that we didn’t want anything shorter. It’s not super succinct but we were feeling strongly about this and wanted to insure that this board, and future boards, didn’t let this slip. Any thoughts?

Scott: We may want to show this to a lawyer before we adopt it. We are heading in good direction but some of the wording especially in Section 1J could raise some legal issues.

Beth: I agree. I also wanted to mention that Carolee suggests biannual staff surveys and audits to avoid survey fatigue.

Diane: We took out any mention of how often the surveys have to happen.

Paula: The audit doesn’t need to be done as frequently. It’s more about systems. Most commonly staff surveys are in policy as happening every other year, either in odd years or even years. Also in item 1J- grievance implies unions, so you may want to choose different wording.

Desmond: We will show this to Babak.

Janie: Do we really need to say we won’t illegally discriminate? Are we so worried we are breaking law we have to put it in the policy? This is already CA law.

Stacie: When we wrote this, it was over and above law because at the time, anti-discrimination laws in CA did not cover transgendered employees and we wanted to make sure we were protecting everyone. In the past, instead of thinking of policies as a whole, we have added in more and more items and it really didn’t serve us.

Desmond: I had no idea what distribution of wages was at the co-op was until this year because it was not reported on.

Stacie: I think that’s where we fell short, not the policies. We should have been asking those questions when the policy was reported on.

Diane: I wonder if we should pause since we are going towards writing fewer rules. The need was so strong to help staff and I think we have met that with the end and the work we have done with them.

Janie: We can’t come up with the perfect policies. We have to ask for the right things in our reports.

Paula: If you get too specific you leave yourself open to leaving out something. There has to be ability to be more flexible in that.

Desmond: What we were getting for the last 5 years with this policy was not that informative which is why we asked for a staff survey.

Paula: The staff survey uncovered a lot of these problems you are discussing now.

Scott: I think we are looking at the wrong things. We shouldn’t be looking at compensation, the survey. We should look at metrics, survey outcomes, turnover, etc., rather than diving into the details.

Desmond: I think we should table this for now. We can’t seem to come to a consensus.

Janie: Have we talked to other boards about staff treatment policies? I would be interested to see what other co-ops have. Especially ones that are examples of a very productive, happy staff like Wheatsville.

Desmond: Their business is very different. They are a growing business.

Stacie: Just because there is a lot of discussion doesn’t mean there isn’t common ground and I think it is important that we do bring this back.

Desmond: Not next month though. Maybe in the next board year.

Stacie: I think it is important to wrestle with these discussions.

Zoë: Since we are struggling with all the policies, I think we could table this and make it the first policy that gets looked at once we start that process.

Janie: I think the staff end is great; I don’t want to discount that. That was really good work.

Zoë: I think we have a tendency to table things as soon as there is conflict or discussion. I want us to make sure we bring this back.

Stacie: We could ask the new board to reconstitute the task force at the beginning of next year and make reworking this policy a priority.

Scott moves that the board ask the new board to reconstitute the Treatment of Staff Task Force in the new board year and make this policy one of their priorities.
Janie seconds
Motion passes unanimously

Break 9:10- 9:20

Annual Meeting Update and Member Linkage at Annual Meeting

Zoë: The member linkage task force would like response on this idea. The purpose is to provide a forum for members to ask questions and engage with the board. We would pose the question “where do you see the co-op in X years, and what should we start working on now to get there.” We would like to ask you to help as facilitators at each table. Each facilitator would gather ideas from the members and report back to members.

Desmond: I would suggest 5-10 years rather than 40.

Stacie: Some people just want to talk rather than have a facilitated conversation. We need to make sure to have a space for them too.

Julie: I had the room set up as usual—round tables in front long, tables in back, and a children’s area in the far back. We could have those who want to participate come up to the round tables and everyone else mingles by the long tables.

Bija: There was an interest brought up by one of the candidates about Q&A for candidates.

Doug: We have not done this in the past and with the number of candidates I think it would take up too much of the meeting’s time. There are certain things that have to be presented at the meeting according to the bylaws.

Zoë: We could give people the option of emailing candidates specific questions.

Scott: I would be in favor of more time for Q&A and less time to discuss the future of the co-op. Sending a private email isn’t as effective.

Diane: I don’t think this is an audience that is coming to have their choices swayed or made up.

Doug: There needs to be a provision for people there to express their outrage and that was what we are trying to achieve with the member linkage portion of the meeting.

Election Update

Desmond: Mailings went out last week and the voting box is out.

Doug: You mentioned getting emails for the candidates for members, I wanted to point our most of them are in the voters’ pamphlet.

Desmond: Do we have to talk about allocating time to campaign at the store?

Doug: If everyone wanted to campaign at the same time that would possibly be a problem. But so far not many have expressed interest. The end of the voting period is usually the most important. People who are still trying to make up their minds are paying more attention then.

Janie: I would like to see us do some cost saving of the election next year -- maybe electronic ballots?

Doug: The process of the election is currently governed by the bylaws. It states we must send out a physical ballot.

Julie: Have you discussed a special meeting to accept the election results?

Doug: The board accepted a calendar that said June 16th.

Zoë: Since we are scheduling a special meeting for the GM search, can we combine the two?

Janie: We can discuss that at the Task Force meeting on Friday.

March Retreat Report

Zoë: I thought we should be sure to get feedback on the retreat before it gets too far behind us. Thoughts?

Desmond: The retreat touched on a lot of significant things in terms of coming up with a board work plan.

Stacie: The report from Todd didn’t seem very thorough or useful as something we can pass on to new members.

Scott: We don’t want to move too far forward before GM search over.

Zoë: When you say getting ahead what referring to?

Scott: Conversations about roles you want to have.

Janie: I agree this is not useful—I was not at the meeting and this report didn’t help me understand what happened.

Stacie: This is the time to give him feedback since this is the first meeting we have done with him. We talked about a lot of specific things that were not reflected in report.

Janie: It all sounds good but it’s not actionable.

Zoë: So we should talk about what came from the meeting. In the report I typed up, the bullets are next steps we all talked about, followed by my suggestions for follow up to draft a board work plan. This board has a lot of years of service, so I suggest we draft a plan for the new board to accept.

Scott: I want to look to Paula here. Do you think we are getting ahead of ourselves developing a strategic plan before the new GM is hired?

Paula: It’s good to have a clear idea of what you want. Collect that and hand it over to the next board.

Desmond: I thought when we decided to start working with CDS there was a risk we would become dependant on consultant. We have to own it. It’s okay with me that he just sent post-its; we have to take ownership.

Stacie: How are we going to get a work plan ready in one month?

Zoë: I would be happy to work on this plan. There are lots of pieces already there.

Stacie: I would like to make an action item for the whole board to give Zoë the items you want to include in the work plan in one week.

Zoë: Do we want to explore options for self-assessment other than what we have in the policies? Todd sent some ideas for assessment focused more on the operations of the board rather than at a policy level.

Desmond: I think that is something to propose in the next board year.

Janie: I am afraid of piling too much on the new board.

Scott: I think we already go above and beyond with the existing polices.

Stacie: I agree it is too much right now but I think eventually talking about how well we do with our ground rules would be a good form of self-assessment.

Consent Calendar
Presented: Consent Calendar Items:

6.2 Motion: Accept April 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: Approve Third Reading Ends Report (Staff End) Zoë
6.10 B4 Item L: 1st Reading Desmond
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 April 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
6.11 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:

6.9 Motion: Approve Third Reading Ends Report (Staff End)
6.10 B4 Item L: 1st Reading (postponed)

Scott moves to accept the consent calendar as amended
Stacie seconds
Passed unanimously

Ed: I wanted to pull this and give it its own vote since it is such an important End.

Scott: I would like to point out that this end is a means to an end for our other ends. Without a satisfied and motivated staff, none of these other ends would be possible.

Scott moves to accept the staff end policy as written in item 6.9
Stacie seconds
Motion passes unanimously

Next Meeting –
Facilitator: Stacie
Time Keeper: Bija
Recorder: Laura

Zoë moves to adjourn to closed session at 9:58 PM
Diane seconds
Passes unanimously


Notice of Closed Session

A closed session of the Board was called to order by Ed Clemens 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, Ed Clemens, Scott Lay, Diane Parro, Desmond Jolly, Janie Booth, Bija Young

Directors Absent: Brietta Oaks

Staff Present: Beth Tausczik

Guests Present: Paula Gilbertson

The Secretary determined that notice of the agenda item was duly provided to all Directors by notice on the agenda published on April 28th, 2014 as required by Bylaw Art. VIII §6(C), that a quorum of Directors was present under Art. VIII §6(B), and that the closed session was agreed to by a two-thirds vote of the Board of Directors during the agenda review section of the meeting, pursuant to Policy GP(3).

The board, Beth and Paula discussed the Wage Proposal.

The meeting was adjourned by unanimous consent at 11:00 PM.

/s/ Zoë Plakias, Secretary

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