February 18 2009
Present: Margaret Drye, Tricia Groff, Ed Howes, Donald Kreis, Kay Litten, Diane MacDonald, Richard Schramm, Mike Yacavone
Absent: There were no Board members absent.
Staff: Terry Appleby, Eugenia Braasch, Steve Miller, Tony White
Guests: Ned Dwyer (Hanover Co-op member), Jay Simms and Jim Godfrey (Tyler, Simms and St. Sauveur)
Welcome and Introductory Remarks
Donald Kreis called the meeting to order at 5:31 p.m. Introductions were made around the table.
Agenda Review & Changes
The agenda was rearranged, moving the informational updates about the Nominating Committee and Annual Meeting before dinner.
Co-op Stories
Don Kreis reported that he had spent the past weekend in Philadelphia, PA, where he presented a talk about policy governance and fiduciary responsibility to the Weaver’s Way Co-op Board of Directors. He enjoyed visiting that Co-op and learning about its stores, farm, and produce market.
Approval of January 21, 2008 Minutes
MOTION: Kay Litten moved to accept the January 21, 2008 minutes amended as follows on p. 4, Meeting Review text: “Board members agree that email is a useful tool for communication, while respecting the necessity to make decisions at meetings.”
Ed Howes seconded the motion.
VOTED: To accept the January 21, 2008 minutes as amended.
8 in favor, 0 opposed, 0 abstained, 0 absent.
The motion passed.
Prior Month Action Items Review
1. Propose a process for addressing Hanover Co-op capitalization planning next steps. (Don, Terry)
2. Propose revisions to Co-op Ends Policies, reflecting Michael Shuman’s recommendations. (Don)
3. Make arrangements for appreciation dinner for Bob Hayes, Board members, Senior management team. (Genie)
4. Propose a revision to GP 4.5 policy. (Don)
5. Identify new data measures to track EL 3.7 Good Will. (Terry)
6. Outline a process for complying with policy GP 7.4. (Nominating Committee)
7. Discuss and plan member linkage efforts. (GP 2.1 Board Deliverables) (Board)
8. Discuss Co-op Service Station as part of 3-5 yr. Strategic plan. (Board)
9. Identify and solicit candidates for the Board vacancy. (Nominating Committee)
10. Discuss the proposal for changing the fiscal year. (April meeting)
February Monitoring Reports
EL 2 Financial Condition (Terry)
Discussion: Nominating Committee
MOTION: Richard Schramm moved to approve the slate of six candidates presented by the nominating committee. Mike Yacavone seconded the motion.
VOTED: To approve the slate of six candidates presented by the nominating committee.
8 in favor, 0 opposed, 0 abstained, 0 absent.
The motion passed.
The Nominating Committee presented the following slate of candidates for the upcoming Board election: Ned Dwyer, Paul Hoffman, Don Kreis, Diane MacDonald, Corey Martin, Janet Saint Germain. This was a repeat vote on the slate because a member of the slate approved in January decided to withdraw his candidacy and a Co-op employee decided to run for Board service. The candidates will have the opportunity to express their views prior to the election on Co-op matters via local Community Access TV. It was noted that two people recently expressed interest in running for the Board, are considered very strong candidates, and have been encouraged to run next year. The Board thanked Kay Litten for her leadership of the committee, and Board members were asked to consider serving on the Nominating Committee next year.
Discussion: Annual Meeting
The Board Administrator updated Board members about annual meeting plans. Arrangements are proceeding according to the guidelines that the Board outlined in January, with the theme of presenting cooperative solutions to today’s challenging economic conditions. In an attempt to draw larger member participation, the meeting will take place at a different location (the Hanover Richmond Middle School), time (Saturday morning, 9-12), and program (the formal business meeting plus a Co-op services and food Expo). Several cooperatives representing other economic sectors have been invited, and enthusiastically agreed to present information about their organizations. A floor plan of the event was distributed, and Board members briefly discussed their roles at the event. The Board decided to hold its formal business meeting at 10:30 a.m. and will finalize the agenda details at the March meeting.
The meeting broke for dinner at 6:15 p.m.
The meeting resumed at 6:53 p.m.
Policy Monitoring
El 2 Monitoring Report
MOTION: Michael Yacavone moved to accept the EL 2 monitoring report with acknowledgement of non-comliance. Ed Howes seconded the motion.
VOTED: To accept the EL 2 monitoring report with acknowledgement of non-compliance.
5 in favor, 2 opposed, 1 abstained, 0 absent.
The motion passed.
Don Kreis abstained, explaining that because he received the Board packet five hours prior to the meeting he did not feel he was given adequate time to review the materials.
Because the report noted non-compliance regarding Sales Growth and Net Income, a lengthy discussion ensued about the plans for boosting sales and controlling expenses. The employee benefit of 20% discount on Co-op food purchases was a particular focus. It was noted that the percentage of Co-op employees now shopping at the stores has risen dramatically in response to the benefit, to 90% employee participation. The benefit cost during 2008, the first year that this benefit was offered, was estimated to be $160K. The Management Team is assessing the merits of continuing this benefit. Board members also commented on the liquidity ratios reported, the number of full time employees, the employee 2008 bonus program ($325K), and the impacts of the Lyme Road Market project.
2008 Audit Presentation
Jay Simms and Jim Godfrey of Tyler Simms and St. Sauveur presented the 1/03/09 Audit report and responded to questions regarding the audit timeline and communications, days available cash on hand, long term debt, wages and benefits. The Board requested a copy of the final comments letter from audit team. The auditors expressed concerns to the Board about the number of adjustments to journal entries and the timeliness of the Co-op staff response to their requests for information. The audit revealed negative trends in productivity, increasing costs of labor (in real dollars and in number of FTEs) and a decline in real growth in sales.
Executive Session to discuss the Annual Audit
MOTION: Michael Yacavone moved to go into executive session to discuss the Annual Audit. Tricia Groff seconded the motion.
VOTED: To go into executive session.
8 in favor, 0 opposed, 0 abstained, 0 absent.
The motion passed.
Executive Session began at 9:05 p.m. and ended at 10:00 p.m.
2008 Audit Acceptance
MOTION: Richard Schramm moved to accept the 1/03/09 Audit Report. Tricia Groff seconded the motion.
VOTED: To accept the 1/03/09 Audit Report.
6 in favor, 0 opposed, 2 abstained, 0 absent.
The motion passed.
Don Kreis abstained, explaining that because he received the Board packet five hours prior to the meeting he did not feel he was given adequate time to review the materials.
Patronage Refund
MOTION: Richard Schramm moved to defer the patronage refund decision until February 24, 2009.
Diane MacDonald seconded the motion.
VOTED: To defer the patronage refund decision until February 24, 2009.
8 in favor, 0 opposed, 0 abstained, 0 absent.
The motion passed.
The Board considered the options of issuing the patronage refund via cash, stock shares, or possibly another form – such as a gift certificate for Co-op purchases. They agreed to consult the Co-op attorney about the legal and tax implications of this different approach. Given the need for additional information and the late hour, the Board decided to hold an additional meeting on February 24th at 7:30 p.m., in order to make a decision about the refund.
Meeting Review
There was no meeting review discussion.
Meeting Adjournment
MOTION: Diane MacDonald moved to adjourn the meeting at 10:15 p.m.
Ed Howes seconded the motion.
VOTED: To adjourn the meeting.
8 in favor, 0 opposed, 0 abstained, 0 absent.
The motion passed.
Respectfully submitted,
Eugenia F. Braasch Kay G. Litten
Board Administrator Secretary
Action Items:
1. Propose a process for addressing Hanover Co-op capitalization planning next steps. (Don, Terry)
2. Propose revisions to Co-op Ends Policies, reflecting Michael Shuman’s recommendations. (Don – January)
3. Make arrangements for appreciation dinner for Bob Hayes, Board members, management team. (Genie – spring)
4. Propose a revision to GP 4.5 policy. (Don)
5. Identify new data measures to track EL 3.7 Good Will. (Terry)
6. Outline a process for complying with policy GP 7.4. (Nominating Committee)
7. Discuss and plan member linkage efforts. (GP 2.1 Board Deliverables) (Board)
8. Discuss Co-op Service Station as part of 3-5 yr. Strategic plan. (Board)
9. Discuss the proposal for changing the fiscal year at the April meeting.
March Monitoring Reports
Global Ends Monitoring Report (Terry)
