First Alternative Board of Directors
Meeting Minutes
Tuesday, March 14, 2006

 

Board Members present: Joanne McLennan, Colin King, Max Jones, Steve Albright, Toni Hoyman, and Dave Hockman-Wert
Board Members absent: Chris Bentley, Esther McEvoy, Margaret Jack
Staff present: Michele Adams
Board Advisor: None present
Consultants present: None present
Owners present: None present
Scribe: Kevin Oder

 

President Joanne McLennan opened the Board meeting at 6:30pm.
I          Owner Comment:  None
II        Approval of Consent Agenda:
Motion 03-2006 (#1) Motion to adopt the consent agenda: approval of February Board meeting minutes, approval of March Board agenda, approval of committee meeting minutes, and approval of GM report. M/S Max/Toni Motion passed 5-0-0

III        Approval of Minutes:
· Consent agenda
IV        Announcements and Affirmations:
· Departing Board Members, please return the questionnaire to Judy Forgey's box
· Owner meeting date is May 23 at 7pm
· The Ice Cream Celebration for Owners on April 11 as part of owner appreciation day to celebrate the new coolers and rack system. Once the schedule is figured out, someone will be in contact with the Board members to spend some time helping.
· If you're not able to help on the 11th, there will be other days from 4/10-4/21 to encourage folks to vote in the elections.
V        Board Calendar and Timeline
· Board Appreciation Dinner is next month
VI        Questions/Comments on Committee/Meeting Reports
Board Development Committee: No questions
Executive minutes: No questions
Finance minutes: No questions
Owner Relations: No questions
VII        Questions or Comments: Monitoring reports submitted by the GM
Questions or Comments:
· Congratulations on the Socially Responsible Retail Award
· Clarification regarding the Lease at the North store is this the same as the lease we talked about last month?
Yes
· Albertson's is a natural food chain?
This is a general note of interest in the news. A company that runs natural food stores called Sunshine bought them out. Some Albertson's may be converted to that format. We don't know if that might happen to the Albertson's in Corvallis or not.

VIII       Patronage Refund Discussion
The Finance committee is not recommending a patronage refund this year due the cash flow issues caused by the business and capital needs of the store over the last year. We are two stores now and with that expansion has come an infrastructure expense that needs to be supported. Going into the future, the finance committee also has concerns over the growth trend since the beginning of 2006 falling short of budgeted targets.

Discussed the provisions of the bylaws related to patronage dividend. 8.2 refer to exceptions that reduce the amount of net savings available for distribution and 8.4 refers to retention of net savings.
· If I understand it, it's not that we didn't make the money or don't have the cash. It seems that it would fall under provision 8.4.
Based on the way the calculation is done, there isn't any money left over for retention because growth is a necessary use of cash that reduces the amount that is available for patronage dividend.
· It still seems that the bylaws mean for 8.4 to be used in the case where we made a profit, but there's no cash available.
It's not applied in the case that there is an identified necessary business use (capital), which reduces net savings.
· It's not explicit that capital is a necessary use. This should be a norm not the exception. It's seems like we've always claimed the exception.
We've given a patronage dividend in more years than not, so the exception is not the rule.

This year we've already spent the money and so there isn't anything available for patronage this year. The rack system was a quick decision that was made and took up the dollars. I think we need to focus on multi-year planning for growth, investment, and patronage dividends.

Motion 03-2006 (#2) Motion to not distribute a patronage dividend for this year due to the expense of infrastructure improvements resulting in cash flow concerns. M/S Colin / Max
Discussion:
· Sense is that we don't have the money, but where does it say that in the finance documents?
· The proforma was updated for the finance committee in February. The one from October was based on projected 2005. The 2005 actual were less than projected. Additional borrowing was also needed to pay for the capital purchases. There was a negative cash flow from operations in 2005 after borrowings. Even with the borrowing, there is negative cash flow for 2006.
· Cash reserves are 11% of total assets. The target was 18-24%. I'm trying to find a consistent message to owners.
· Last board meeting we had a few owners that stayed and one owner talked about patronage dividend as important to him, he's only one owner, but it's one opinion to consider.
· Went over the capital expenditures.
Motion passes 5-0-0
· Discussed the message that Joanne will be putting in her letter to the owners and what the expectations for the future might be. She will also be referencing the community outreach done in 2005 to let owners know the positive investments their coop is making in the community.
IX        Monitoring Report for L-4 Policy (Code of Conduct)
Questions/Comments:
· Ideas and strategies - it would be nice to have target dates for the Board to expect and will we see some implementation follow up in next year's report?
Yes, I go back and refer to them year to year.
· About the policy, I think examples of conflict of interest and no conflict of interest are useful.
· Is there a new employee orientation where they go over the policies?
They're referenced in their orientation and the manual is available for employees to go over them. They don't go over all the policies at the orientation. We do go over them at the supervisor meetings. Having the supervisors then go over them with their staffs at the same time would be helpful.

Motion 03-2006 (#3) Motion to approve the L-4 monitoring report as submitted. M/S Steve/Dave Motion passed 5-0-0

Review of L-4
Revision date: 2/16/05
Discussion:
· Will defer to the calendar committee change
X        Monitoring Report for L-16 Policy (Marketing / Merchandising)
Questions/Comments:
· I like that we have an orientation and store tour for potential new owners. It would be great to do this for new Board members as well.
· Market FA as a Cooperative - The first number of points on this didn't seem to address this topic. There are some on the second page. It's tricky and it's something's we're learning how to do. I'm not sure that it's easy to grasp or get across which is probably why it's not addressed very clearly. I don't think it involves us marketing ourselves and getting new interest in cooperatives.
· Pete Davis last month used a concept the concept of three circles - core, target, and greater population outside of that that he talked about. We haven't thought of a program to move people from the outside into our core group ad we need to develop a program to do that. That would provide continuity to this point of marketing the coop. The GM is not the only one responsible for this; the Board should be as well.
· The ORC is going to be tackling the issue of education this year to help address that point.
· This is where we activate the core people we have to step in and participate.
· FA Marketing practices - I've received comments about the icicle lights around the roof at Christmas noting they come from China. They're pretty and make us more visible, but is there any way to do this that's more environmentally friendly? It seems incongruent with our other marketing and environmental practices.
· I'm impressed by the amount of projects and programs we keep up on a annual basis and I commend staff on that.
· How many Rotary or Kiwanis are actually co-op members and it's an interesting idea to give us exposure to those groups.
· I do think it's a good idea and might it be a Board member. It would be good to be recognized as a significant presence in our community.

Motion 03-2006 (#4) Motion to approve the L-16 monitoring report as submitted. M/S Dave/Toni Motion passed 5-0-0

Review of L-16
Revision date: 2/16/05
Discussion:
· None
XI        Preview of L-5 (Staffing & Staff Treatment)
Questions/Comments:
· From last employee survey, one focus area was communications between staff and managers. Please give us an update on this issue and how the things that were put in place have been working.
The new survey will be included.
· To get meaningful feedback, there would have to be guidelines that are being evaluated in the survey. This addressing the mission statement of a cooperative workplace.
· From the survey, could there be standards developed which then could be perfected over time?
We do have a set of policies that address what the workplace is.
· My concern is relating these nuts and bolts things to our mission statement.
· I'd like to get some information on how many new employees, less than 2 years, we have working in the stores to get a handle on what kind of cooperative background the employees have now.
That should be in the survey.
· What is the percentage of young people on our staff?

XII        Preview of Vision & Mission Statement
Questions/Comments:
· Went over last year's questions & comments
· Discussed the intent of the Board's requesting the GM comment on these principles rather than making them part of the policies.
· When this originally came up it was for long-term vision by the GM rather than what has occurred in the last year or in the near future.
· The L statements are similar to this now that the GM reports on future vision during these policy reports. It is somewhat redundant to have this separate visioning report.
XIII        Proposed Revised Policies Introduction
This is a draft and we want to look at the concept and be sure that everyone's clear on how this transition would work. We'll do a quick overview and then we want everyone to go through the policies, compare them to the proposed draft, and if there's a major issue that's been missed in some way, email those comments to Joanne so they can be incorporated into an updated draft to bring back to the April meeting.

The basic goal is to spend our time more wisely during the year. The plan is to concentrate the policy reviews into part of the year, spending more time on them per meeting, but for fewer months of the year. There is currently a lot of duplication between the policies that we're trying to get rid of. This draft, once completed and accepted by the board, will replace the current policy statements. They will be grouped into four overall policy categories: Store, Owners, Community, and Administration. Language from all of the existing policies has been redistributed under these four new categories with an effort to remove redundancies.

The expectation is that by going through these new policies and combing through the old policies it will ensure that Board members become very familiar with the policies, focus on what's important in them, and then be sure that the important items are still in the new policies. There are a lot of generalities in the policies that are also covered already by our vision & mission. The new policies attempt to be more measurable.

The Vision, Mission & Guiding Principles are a level above the policies and the policies are reporting on how we fulfill them. Language tying them together is a good idea.
· Did you try to get the overarching 17 policies incorporated into these new policies?
No, there was so much overlap that I took a step back and looked at the specific points and put them into the framework of these four basic categories.
· In looking at this I see four major areas that weren't explicitly defined before and that's a shift and how do we make those all fit into four areas. A preamble to each of these four areas that lays out the intent of each area and the why behind each policy with its key focus would be helpful
These are set up with a focus on four separate audiences and the policies are organized around that. It could be laid out in the preamble.
· When I look at these four areas, I see them as four parts of one larger idea of the Coop, but they're not prioritized. In order to understand one section you'd have to look at it in relation to another area. The importance is not to prioritize one or the other, but they should be reported in an order that makes sense one to the other.
It is arbitrary in that they're all important, but it's organized by looking that the broadest audience (everyone who shops) to the narrowest focus (those who work at the coop).
· I would say that the community sets the context for the store, as it's where we draw our shoppers and owners.
There are many different ways to look at it, but we should look at it as what is the most useful to the Board in working with the GM and the annual Board cycle. It may change as we work with it and see how it goes.
· My biggest concern with this is that, as the Board will be changing, someone will need to take ownership of the project into the future.
o Into the future, the BDC chair could take ownership of this project as Max leaves the Board in May.
To me this structure is more useful, but if the new Board doesn't find that it works for them, they can always revert to the current policies we've been using. I've also tried to pull in other parts of our manual that someone is responsible for and reports back to the Board on.
· Do we have the rest of the cycle fleshed out past the policy-reporting portion of the cycle?
In the Overview of the draft, the schedule is laid out and is still being fleshed out and refined. So it's started, but not finished.
· I see the advantage to doing it this way in a four-month period and then if it needed changes, there's time during the year to reflect on them and revise them as necessary before the next cycle.
· I have an idea to transition to this. I really like the way the calendar has been restructured in an over arching way. I think the process of reworking the policies into these new policies is going to take awhile, though. I think a transition step would be to keep the existing L's & G's and lump them under the umbrella areas and report on them, while still working on the new wording.
That would be difficult with the amount of work involved on reporting on all of this during a four-month cycle without getting rid of the redundancy.
· The other option is to adopt them next month and then be flexible with reworking them during next year's cycle.
· I really think we can do this and accept it with the understanding that we'll be refining them during this upcoming year. It's only 25 pages to go through and we can get started on the process and use this is as a trial year.
· I'm happy with that.
What I want to emphasize is that there's nothing of value except what the current Board feels is of value to them. Make sure that everything of value from the existing policies is included in the new policies and then keep making them work for the new Board as they go.
· I'm sure there will be changes to this draft, but this is a starting point for us to move forward from.
· Are the Board members who will be staying with the Board interested in continuing with this project once the Board changes in May?
o I have concerns about trying to get it done in such a short period of time.
o It's about our role as a governing body of this business. These reports are the only way that we have of exercising our governance. This process feels rushed to me.
o The monitoring reports are what we evaluate the GM on at the end of year. Some thought should be given as to how we integrate the evaluation with these new policies.
o So in these policies it states that the GM will be evaluated by these reports where she states what she's going to do and then reporting back as to what she's done.
o If this doesn't get done before the new board comes on, then the new board will jump in and participate to the best of their ability
o I think the transition would be difficult under any circumstances, but I don't feel that I'm getting what I need from the existing policies, so I see the benefit to restructure and am willing to move in that direction.
o That's a good point. The policies aren't that many pages and I think the only reason that it seems like a large project is because they're already so convoluted and confusing as they're written which means they have room for improvement.
o I think if I get going with reporting on this new structure, we could see how it goes and we can improve it as we're moving through it.
o A long process, though, is more time to vet. It seems like you have time to look at them and if it's worth doing, it's worth doing well.
o I think next month will be a better time to get a sense of how everyone feels about the process moving forward.
o This will be up for discussion next month and if everyone's comfortable they can be adopted, but otherwise the process will continue.
Everyone will go through this draft individually and give feedback to Joanne by end of March so it can come back to Exec to include in next month's packet.
Meeting Adjourned: 9:35pm