Fort Collins Food Co-Operative Board of Directors Meeting May 16, 2016; Room 101, Griffin Bldg, CSU Campus Minutes by Laura and Ed
Attending: BOD: Steve Del Grosso, Patrick Gill, Ruth Inglis-Widrick, Laura Lyznicki, Ed Secor GMT: Trinity Bigford, Theron Welch Member/Owners: James Hale (also CSU researcher), Jean Opsomer
Meeting started 6:07 pm
1. Member/owner input Introductions of Jean Opsomer and BOD. Jean is potentially interested in joining the BOD. He served for 10 years on the board of the Wheatsfield food co-op in Ames, Iowa, and more recently on the board of the Ft Collins Cat Rescue, serving as treasurer. He was also briefly on the board of the Ft Collins Food Co-op several years ago. He has an MBA.
Review of recent transition to GMT model and less recent adoption of policy governance for BOD led to further discussion of pros and cons of policy governance. Noted that performance criteria for GM is strictly financial, and there is no way to gain feedback from employees on other aspects of GM performance. (N.B. The X policy limitations actually do provide metrics other than financial with which to evaluate the performance of the GM) With GMT model, half of staff (6 of 12) is on GMT, so feedback of staff to GMT is intrinsic. Nevertheless, it was proposed, and the BOD agreed, that the process of annual review of GM/GMT should be changed to accommodate more information on aspects other than strictly financial performance.
There was also some discussion of role of BOD and relation to GMT. Some feeling that BOD’s focus on expansion/relocation over last few years detracted from keeping store relevant to owners & customers. GMT is focused on making Co-op a sustainable business; we don’t need to be a “million-dollar” business.
6:23 Ruth officially called meeting to order.
2. Consent Agenda (4/18 minutes) Steve moved approval of 4/18/16 BOD meeting minutes, Ed seconded. Approval unanimous.
3. GMT reports a. X3 Report—Asset Protection & April Financials X3 Report, revised with details of insurance coverage, indicates compliance with X3 policy limitations. On seeing the insurance coverage, there was question from the GMT members present if we are overinsured for equipment. GMT will follow up with Tara. Discussion around policy X3-6, conflict of interest. GMT has procedures in place to prevent conflict of interest in suppliers or vendors—collective decision making in choosing vendors, so no one
has ability to deal for the store in self-interest. Example of Katie, owner of Native Hill, being on board while Native Hill is major produce supplier to store—noted that Native Hill had established relationship with store before Katie joined board. But perception of conflict may still be there among member/owners or customers. Care should be taken to be aware of potential for perception of conflict of interest, even if technically not so. Ed noted that he still needs to sign BOD conflict of interest statement. As there were two different revisions made to the X3 report, GMT is to provide a consolidated updated version of the report. The store showed an approximately $1,200 loss for the month of April. Sales were slightly below projections ($92/day under), and labor was very slightly over (town hall meeting, and some marketing) though essentially on target, but loss was due primarily to three large orders placed at the end of the month to take advantage of sale from distributor—to be able to extend those sale prices into May. These orders were invoiced on April 30, thus counting toward April COGS, though they are really May inventory. This highlights disadvantage of monthly P&L statements—in quarterly statements, these sorts of blips will even out, and be compensated as well by updated physical inventory. Noted that April 2016 was, however, much better than April 2015, when there was a $19,000 loss.
c. Website, discount employees, other store updates GMT is still working on who will take over website duties. Andrew will be available to help/consult for a bit longer—through June. GMT discussing possibility of a new website that will be easier to maintain. Trinity will be posting/sending out the newsletter from here out. Jordan has gotten a full time job. He offered to continue working weekends, but GMT feels he should actually have a weekend, so probably won’t take him up on that. He would like to continue helping Co-op out in some fashion. Produce cooler was repaired—frost buildup removed—and is working noticeably better. It is, however, still not deemed long for this world.
b. Follow up on April X2 issues. Discussion of lingering question about X2-2, separation of capital and operational items. Following issues were raised: What does equity mean for member/owners when they join up? What are expectations about how the membership fee is used—shouldn’t be to stock shelves, but could be to provide new shelves (e.g. produce cooler, the perennial topic). Expectation is likely that the membership fee is refundable, though the agreement the member signs does specify that the fee is refundable only if funds are available—this could be only when next new membership is paid up. Paramount that member/owners trust that their capital is being used for store improvements, not day to day expenses. There is lack of clarity in the written policy—“The GM will not cause or allow [business] plans that: Omit credible projection of revenues and expenses, owner investment and return, separation of capital and operational items, . . .” Are the capital and operational “items” actual funds/accounts or just bookkeeping lines? Tara says that there have never been an actual “physical” separation of capital, e.g. all membership fees put into separate account. What is the goal of this policy? Seems it would be to
avoid spending capital on operational expenses, such as payroll, inventory. This seems to be what happened in 2015, and put the Co-op in financial jeopardy. What is the line between having an operating cushion and a restricted capital fund? Does the BOD have to approve spending from the capital fund? Should the BOD have that authority, or is this still an operational decision? What is risk of not having clear separation? What is hierarchy of claims on capital? (Bylaws section on dissolution lists paying creditors first, then members (equity), then any appropriate patronage dividends, then distributing any left over assets to other non-profit, not for profit, or cooperative). GMT feels frustration at being pressured over situation they did not create, and are working hard to rectify. BOD is reacting to last year’s losses, but prospect of restricting access to “capital” funds is frightening. Where membership fees go does not seem to be an issue with member/owners—staff has never gotten a querry about that, or questions about where “capital” disappeared to last year. Money is going into the bank, but we don’t have enough to justify setting any aside in a separate account, only to pull it out again right away. We will be spending some of that money in the bank on a produce cooler in the near term, which is a capital item. As we move forward and accumulate more cushion, we can look again at how to separate the capital and operational funds. There have been maybe 20 new memberships since the first of the year. BOD will revisit issue in next year’s X2 report, meantime BOD should clarify intent of policy.
Patrick moved acceptance of GMT reports, Steve seconded; unanimous approval.
4. Town Hall Meeting discussion Tabled till next meeting. Meantime BOD to review and comment online on feedback from member/owners. Issues that draw attention to be on next agenda.
5. Break—cancelled
6. BOD Follow up
a. Solicitation of new BOD members—Jean encouraged to consider joining BOD.
b. BOD Expectations The bylaws require the BOD to “maintain and publish” at least annually, a document outlining the responsibilities and powers of the BOD, and those delegated to the GM/GMT. Do the adopted Policies meet this requirement? Strict adherence to reporting outline of policy governance may be unwarranted, may need to revisit how the BOD interprets this issue. Email communications are a bit overwhelming, it can be difficult to reconstruct threads in multiple replies. Look into other means of group communication. Perhaps Ed or Amber can give pointers in using Google Groups to better manage email communication. Clarification of titling emails—
“Urgent” requires response within 24 hrs., “Timely” requires response within a few days. Note that the “Urgent” label will show up in all replies too, which contributes to overwhelm when opening mailbox. How do we know if folks have read the emails? Don’t need to clog up works with lots of just “got it” replies, will have to trust that folks have looked, will only respond if have pertinent comments. What is appropriate time commitment to BOD? 10-20 hours/month suggested. 20 hours seems to high to be realistic to some, 10 hours/month more reasonable. Attendance at meetings is expected, but the “three strikes and you’re out” rule seems a bit too much. Honor the time of other BOD members by regular attendance, preparation. Need some process for resignations—BOD members encouraged to bring difficulties to attention of BOD before abrupt resignation. At least some sort of exit interview. Grant reported to be scarce at the store; Patrick will reach out to him to see if there are issues that can be addressed. Ryan mostly has restricted time available due to new job. Ruth would like all BOD members to do research on other co-ops, how they handle management, policy issues. Anyone finding interesting or pertinent info from research should ask for a place on a BOD meeting agenda for a brief report.
Return to discussion of policy governance and BOD/GMT relations: Focus on policy governance detracting from other pressing needs—for BOD to be involved in promoting the Co-op, getting more shoppers/members, getting existing member/owners to shop more at store. Need long range planning/visioning from BOD—1 year, 5 year, 10 year plans. Need to find middle ground for BOD between operational meddling and strictest policy governance approach. BOD should be careful about how much is asked of GMT/staff to support BOD activities—any time spent on doing things for BOD is time taken from store duties. Some danger in GMT model in burning people (GMT/staff) out. Complexities operating with a GMT–suggested having a designated BOD liaison—but this person could become de facto GM. Extra compensation for extra BOD related duties? Committee approach to policy issues could help reduce time in BOD meetings by taking in depth discussion outside regular Board meeting (though could still eat up committee time).
Motion to adjourn at 8:15 pm. Seconded, passed unanimously.
