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First Alternative Board of Directors
Meeting Minutes Tuesday, August 16, 2005 |
| Board Members present: | Joanne McLennan, Colin King, Max Jones, Chris Bentley, Esther McEvoy, Dave Hockman-Wert, Sandra Helmick, and Steve Albright |
| Board Members absent: | Margaret Jack, Toni Hoyman |
| Staff present: | Michele Adams and Dana Allen |
| Board Advisor: | Marcia Shaw |
| Consultants present: | None |
| Owners present: | None |
| Scribe: | Kevin Oder |
| President Joanne McLennan opened the Board meeting at 6:45pm after the
Board / Owner dinner. |
| I Owner Comment:
None |
| II Approval of Consent
Agenda: Motion 08-2005 (#1) Motion to adopt the consent agenda items as written including: approval of July Board meeting minutes, approval of August Board agenda with added Executive Session, approval of committee meeting minutes, and approval of GM report. M/S Colin/Sandy. Motion passed 7-0-0. |
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III Approval of Minutes:
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| IV Announcements and Affirmations: · We visited a few other coops on vacation and we really appreciate First Alternative and their staff. · How do we get copies of the Cooperative Grocers Magazine? o Currently they are shared, one issue for two board members. Some Board members would like to have their own copies. Michele took a list of those who would like their own copy. She will update the subscriptions. · As Toni Hoyman is not here, Max Jones will write the September Thymes article. Toni will be responsible for a future article. |
| V Board Calendar and
Timeline · The September Board Meeting will be at the beginning of the Board Retreat on September 17. |
| VI Questions/Comments
on Committee/Meeting Reports Board Development Committee: No comments Executive minutes: No comments Finance minutes: No comments Owner Relations: No comments |
| VII Questions or Comments:
Monitoring reports submitted by the GM Questions/Comments: · Regarding the patronage redemptions, I just wanted to note that my patronage refund got lost in my pile of mail. Next year we might want to make it more obvious what the mailer is and less difficult to misplace or overlook. Next year we're planning to do the combination mailer with the election, annual report, and any patronage, which should help eliminate that problem. · It's important to indicate what percentage of each owner's patronage was given out. It was a certain percentage of their purchases the refund represented and that percentage information should be on the mailer. · It could be listed on the dividend card when it's printed. · It would be a good measure for the owners to judge year to year if the percentage of the dividend has gone up or down. Discussion of the advantages and disadvantages of giving a percentage off at the register vs. declaring a patronage dividend at the end of the year after the year-end profit has been finalized. Perhaps a target percentage could be established for budgeting. |
| VIII Monitoring Report
for L-11 Policy (Financial Condition): Discussion: · Updated Cooperative Grocers Survey. Notice that we've been reclassed from Extra Large to Large. These stores are more similar to our size operations and should be a better measure for comparison. The median figure is used for the ratios on the Board Quarterly Financial Statement. · On page 35, regarding the campus store proposal deadline, is that just for the proposal or the store? Just for the proposal. We're just barely starting to look at this project now. Motion passes 7-0-0 Review of L-11 |
| IX Monitoring Report
for L-17 (Social Responsibility) Questions/Comments: · What do you consider long term? Over 5 years. If you look too far out, though, it's too hard to plan. · On page 42, #3 on investments, are these things that are locked up for a long time or can we get into them? We have a variety of investments in short and long term. Liquidity is a big issue. With the exception of the restricted funds, our funds are not locked up in long-term investments at this time. · Regarding #3 is it in conflict with some of our other policies regarding asset protection? Social funds are not generally going to be very secure by their nature. In the management policy that we are currently working under, if we have funds that are truly surplus we would then put them into more social funds that were less secure. At this point we don't have what would be considered surplus funds to put them in anything risky. We are looking at moving funds to another local bank at this time, though. · On #1, regarding product selection guidelines, you state that we don't have time to look into each product in detail, but maybe if someone were really interested, they would be willing to do the legwork for you. · I want to underscore the really conscientious job our buyers do in line with our product selection guidelines. I'd also like to thank Michele for the work she's done for owner loans and the explanation of the complexity of it. · Regarding carrying local products, is quantity an issue? Yes, a lot of times we buy as much we can locally, and then we supplement with non-local distributors. This can be an issue for pricing. · Have we ever used our boycott policy? Yes, a few years ago an owner initiated a boycott of Pictsweet mushrooms, as there were labor issues with the company. We still carry an item that's being boycotted, but then usually the sales drop and we discontinue an item if no one is buying it. There are other times that we don't carry a product because it doesn't meet our product selection guidelines and that is a separate issue from a boycott. Motion 08-2005 (#3) Motion to approve the L-17 monitoring report as submitted. M/S Sandra/Esther Motion passes 7-0-0 Review of L-17 |
| X Preview of L-1 Policy (Customer
Service & Internal Coop) Revision date: 2/16/05 Discussion: · Fix the preamble (the wording is from the emergency management policy) · Would questions about the actual plant and shopping experience is included in this policy? What sort of criteria we use to evaluate or define the shopping experience. What are our goals? · #5 isn't clear to me, what is meant by "owner's status and when is it needed to notify the board. · Please quantify these items. What does significant owner participation mean to you and how do you quantify that. · Are there any specific ways you try to educate owners throughout the store through signage for example.. · What is our perception of our customers and how do we educate new and prospective owners about ourselves. · Regarding the budgeted amount of new owners and what programs we have in place for value and responsibilities of cooperative membership. We don't seem to be doing a job of selling the coop off the top of their head. Is last month's new owner's an oddity or a trend? |
| XI Preview of L-2 Policy
(Quality Products) Revision date: 2/16/05 Discussion: · None |
| Break |
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XII Preview of L-7 Policy (Owner
Workers) |
| XIII Finance Committee:
Bylaw Change - Dividends At Finance Committee it was brought to our attention that the bylaws appear to state that the dividend is available for four years, but our last dividend closed after 90 days. There seems to be a discrepancy between how the dividend was administered this year vs. what the bylaws state. In attorney Laddie Lushkin's judgment after reviewing state law for us this year, after 90 days unclaimed dividends have to come back to operating cash. In doing the research necessary to answer the question by Finance committee,
Dana was trying to answer the questions of what to do with "unclaimed
distributions" in the accounting books. Laddie said these unredeemed
amounts aren't "unclaimed" as we had a 90-day limit on their
redemption and they could not be redeemed after the closing date as stated
in the Oregon Revised Statutes. As they were not unclaimed, then the 4-year
clause in the bylaws does not apply. An additional sentence could be added
to the bylaws to clarify in what circumstance the 4-year clause applies.
Also the language of mandatory distributions, with section 8.2 of the
Bylaws showing the reasons for exceptions such as a valid business need,
then 100% of net income can be an "exception". · That "exception" is very different than "retained"
amounts in 8.4. We don't want to have "retained" amounts unless
we really need to. The confusion comes in the difference in definition
between an exception and retention. |
|
Break Executive Session Begins: 8:20pm |
| XIV Investigation of Foundation
for First Alternative This isn't necessarily an action item for tonight, but might be at the Board Retreat. This got put on my (Sandra's) work plan at the retreat last year and I'm reporting back to the Board. · Everything I've known about the interest in a foundation has been driven by Laurie Heilman who is no longer with us. In light of that, do we want to continue researching this idea? I haven't seen a lot of interest in this. · What is the history of our interest in starting a foundation with the coop? Usually someone bestows money that seeds the foundation. I question how it fits with the goals of the Coop. · Largely Laurie inspired it, but there may be interest by other owner members of the ORC. I'm pleased to have this research document as it shows the challenges of a foundation. · The problem I have with starting this organization is the continual need to drum up money and I don't see the need for us to do that. · From a local standpoint, I don't know of any other organization that would act in the local community. It offers the opportunity to enlarge the mission of the coop and to offer the tax-deductible benefits of a foundation. · Thank you Sandra for putting this together. For me it has brought the ideas together more solidly. I don't see that a separate foundation would do much for us. We would only have a small amount of money to put in to this foundation. It says to me that if we want to pursue the programs that are listed in here, to do it not with a separate organization but in terms of our current organization. · I see things that we're already doing in the community. Does this allow us to do these things better and if not, why would we want to pursue this. · If someone is looking for a charitable donation in the local community it could be done through an already established Cooperative foundation. · That is an endowment and I can bring that information to the retreat. · Has there been any owner interest in this through a survey? · Not to my knowledge · I want to express my enthusiasm for the support worker program that supports community efforts. · I have a question on the wording on page 54, how is "related party" defined? · First Alternative would be a related party. · Your comments have been very welcome. I haven't found any individual that is particularly interested in this program. That idea may change at the retreat. Finance committee has no interest for putting it on the agenda, maybe ORC would be interested. I'd like to get ideas about what further information the Board would like to have answered at the retreat regarding this issue. In order to retain a 503c status, any distributions would have to be clearly in the public benefit. · I've heard a lot of mixed comments about this topic. I'd like to know if this is a topic the board as a whole wants to pursue either at the retreat, discontinue exploration, or give to a committee for further exploration. Motion 08-2005 (#4) Motion to drop the subject. M/S Colin/Max Amended Motion 08-2005 (#4) I move that the Board, having examined the subject of establishing a foundation, determine that we are no longer interested in pursuing the subject of a foundation. M/S Colin/Max Discussion. · I'm concerned that ORC still has it on their agenda. · I can drop it from our agenda if the Board is not interested in pursuing it. Sandra has researched it and reported on it here to the Board. · I don't see that the motion actually stops another group of people from coming to the Board with a future proposal. · If the Board is deciding that we don't want to pursue this, then ORC isn't going to change that. Motion passes 6-0-1 In terms of our action plan for the 4th Quarter, this will be dropped off. · I appreciate the work of Sandra identifying the complexities of establishing a foundation so that we could make this decision. · I also appreciate identifying what our contribution to the community and that we are clear about what we do in the community and what our owners are contributing to. |
| XV BDC - Election Policy Change Motion 08-2005 (#5) Motion to accept the policy change as stated. M/S Colin/no second Discussion · I think this is misdirected language about what it means to be a staff member on the Board. Nobody represents the staff. The limitation on staff to serve on the Board is to avoid a conflict of interest by the staff. It is true that the rule states only one staff member can be on the Board, but that's not what caused the problem in the election that led to this discussion. It's completely unwarranted that a Board member would have to resign if they became staff and there was no other staff on the Board at the time. I think that the whole idea of limiting staff on the Board is unnecessary. · The history of this goes on before I became a member of the Board. Apparently there was a complication because of the status change of a staff member. The thinking on this was that, since only one person can be a staff member on the board, and is presented to the voters as such. It may influence how an owner sees a candidate. In theory, if status is changed, there could be a series of status changes creating a situation where other staff can never run for the Board, as there can be only one staff on the board at a time. · The problem was with the wording in the election pamphlet and not the status change. · The idea behind the statement in the proposed policy change is that, if you're a staff member, people may vote for you or not because of your status as staff. It may be an influential factor for some owners. Some may want a staff member to be on the Board and others may prefer that no staff serve on the Board. · I don't think that if you become staff you should have to resign. · I agree that no one represents the staff, but I don't see that this policy states that anyone does. That's not the issue that it's trying to address. · A status change during the election is a separate issue from a change of status during the year. · My recollection is that at one time the election rules did not allow any staff member to be on the Board. o That is correct. The bylaws were rewritten to include one staff member a few years ago. Jim Dobis was the first staff member to be on the Board. · Subsequently there was another problem and this is addressing that issue. · This is a discussion about the procedures about getting on and off the Board, not about the rules of the bylaws. The issue came up when two staff members were running for the one position and during the middle of voting one person's status changed and that's part of the problem. · The compromise could be that if you become staff you could have them have to rerun their position in the next election. They would not have to immediately resign their position, but their term would end at the next election cycle and they would have to run for the Board as staff in that election. That would give the owner's the opportunity to vote on them as such and also for other staff members to run for the Board in the very next election. · I think that if you're on the Board and your status changes at any time, your term will always be up in the next election either going on or off the staff. This would be fairer than just in one direction and would address the issue of owner's voting for someone based on status in either way. · At this point I'd withdraw my motion as the Board is at an impasse and needs to clarify its position. The motion dies for lack of a second · For BDC we need to clarify, if you're on the Board and your status changes, in either direction, at the end of the year your term will come up for re-election regardless of when your term was originally supposed to end? · We would normally assume your employment status would not be an influencing factor in voting except in the instance of being staff of the Coop that could be perceived as having a conflict of interest. · That you have to open the election either way after a change in status seems fairer. · I like this proposal of having to run at the end of the year as a fine solution because then you'd have that position come up at the end of year to run in the election again and a year is not an unreasonable time to wait for another chance to be on the board. · We don't have to have an exact wording until the next election, so Steve will take this back to BDC to reword the proposed policy change based on this discussion and bring it back to the Board. Steve will also reference the election procedure that is being changed. He will bring back to the October meeting. |
| XVI Board Retreat Planning · The plan is to look at the vision and mission statement and decide if it's okay or not right now so we know that we don't have to look at in depth at the retreat. · There is an item in our mission statement - the democratic staff treatment…the survey showed that staff doesn't feel this is true and management is addressing this, but I think it's the Board responsibility as much as staffs. I think we need to look at the word "democratic" We need to talk about what that means and that the monitoring reports should reflect that mission statement. We spend time talking about owner participation but not staff · Do we reach out to older community where they can't drive and they could call and get their groceries delivered? Could that be discussed? · It's also been brought up about including the Hispanic community. Do we have policies in place to include the diverse community in our area? · The policies are written to link our principles with our practices. We need to drive the GM with our questions in her reports on these policies. We're being challenged to look our vision mission and principles and our goals. · What could we do as a Board in the next year to shore up whatever subject we want to accomplish? So in the time before the retreat we can think about these things so we can come up with those goals out of the retreat. We also should think about our goals about the future growth of the coop to help guide the GM. · The Board's responsibility is to guard, protect, and enable the long-term viability of the mission of the organization. We need to occasionally go over these principles and make sure that they're up to date and in line with our direction. · It makes me nervous when we get away from the mission statement or push it's boundaries. Do we want to stick to what we're doing or branch out? · When the retreat is over are we expecting to have a plan of action and assignments for people to follow up on? · Last year we didn't get as far as we wanted to in detailing the action plan. My opinion is that if we want to back up and review our mission, then we're probably not going to get very far on an action plan. Usually in this time from you can work on one end of the process or the other. · I wouldn't expect everything to be in place at the end of the retreat, the details can be worked out through the process at the end of the year. · My experience has been that the retreats are all different and we get whatever we want out of it. · My opinion is that we should get an action plan together rather than back up and talk about the vision and mission. · We did get accomplished this year what we put on our agenda from the retreat last year. · I'd be curious to know where people think this organization with be in 25 years. · In the time that we have allotted we can either talk about pie in the sky or nuts & bolts and action plans, but not both. At the beginning of the retreat I'm going to ask for direction from the Board about what they want out of the retreat. · What sense does the community have of the coop and what are our boundaries to guide our decisions on growth and how it fits into the coop mission. |
| Meeting Adjourned: 10:15pm |