Board Discussion
· Where does this comment go? It doesn't get talked about it tonight. It can get sent to the next executive meeting.
· Toni would like it to go to the next Finance committee. Marcia agrees it can go to that meeting but advises to be careful on the deadline given because it may take longer to do the research. What does it take to get this item on the next Finance committee agenda? Does not need to go through the executive committee first.
· Suggestion to go to next agenda item because of limitations of timing and come back to it later.

Board Discussion Part II (notes from later in the evening)
· Suggestion for the GM to pursue this option. The extra expense would come from operating expenses rather than an outreach expense.
o A reason to put it below the line because we task the GM for above the line items and this is just an extra expense. So might be good below the line.
· Concern about not knowing the details of the program for commercial business. Is the money going to where we think it is going? Would like to see more research by the decision maker.
· Suggestion to see us meet the request only partly and not all 100 because maybe we want to put the money to other things like patronage refunds or wages.
o A reminder was given that this doesn't affect wages.
o When you choose to spend the money it will take away from any other money you have to spend.
· This seems like the right thing to do and could see the burden divided between outreach and operations. Outreach because of our mission and goals to help acknowledge and make visible our commitment to it.
· Might be best to send this to the finance committee because so much time has been spent already here.
· Another way to look at it is if we had $5000 to spend of alternative energy use, where would we want to place it? Is there another way to meet our goal that might be more effective?

Michele will do some background work and talk to the Finance committee. Since it is an expense, it will come back to Board when reviewing the entire budget and expenses specifically.

· Why were gross margin figures taken from data about large stores and payroll figures taken from the data for extra-large stores? Why not just use one set of data?
o Dana's response - This is intentional. We are on the cusp of being an extra-large store but not quite there. Co-ops with 2 stores and in our process of growth are in the extra-large store category. Historically our payroll has been in the lower quartile for whatever group we have been in. Though, since sales increase, payroll has continued to increase over the years.
o Michele would like to put the upper quartile number in for the payroll and the result will be no bottom line. We have to have more in our bottom line because of our outreach programs compared to other Co-ops.
o The categories (e.g extra-large, large) just switched this year, and so there is no clear line of where we fit in.
· Did we choose the size category before looking at the numbers?
o Yes. We have not reached maturity yet, meaning out sales are still growing so it's hard to predict future numbers without much historical data. These benchmarks help guide our budgeting and choosing the best from the categories is smart use of the data.
o Jerry commented that the board's guideline is to pay median of Willamette valley and other coops not "median" from the Cooperative Grocer Survey.
· These assumptions will be approved next month. They are currently being used to direct the budget process and so this is time to bring up concerns of the direction things are heading. More budget details will come next month.
· Why is non-operating income to increase by 11%?
o Plans are to purchase a Calzone Booth cart and increase special events and cooking classes.
o The expense of the cart will be paid back through the Calzone booth sales over the next 2 years. Same as they are doing with the meeting room kitchen remodel so it is not a usual capital budget item
· Concern that Pete Davis survey is in non-ops section of budget rather than operational section.
o Dana - This is research and development and is always in non-ops. This is because we don't know whether this would ever be revenue.
o Comment that they could see how it could be in both places.
· Michele will be asking for $250,000 for the capital budget. The exact items will be determined by Michele, so this list is just some idea of types of things it could be used for. It will be put in the appendix as a reference.
o For example, Calzone Booth is not really based at the South Store but it was convenient just to put it there for the Board to see.
· $50,000 will be given back related to the rack system
· Why is payroll only listed to increase by 2.2% and minimum wage will be 3%. Don't owner workers get min wage?
o Yes they will get minimum but the Paid Sub category will balance it out.
· Question for Jerry. How does this budget compare with other budgets you have seen? What are some new things you notice or things that look peculiar?
o Assumptions and capital budget are very similar
o Biggest change is shuffling around percentages (not numbers) in non-ops budget (budget last year to this years budget) such Total Governance and OW wages/Appreciation.
o He is looking at last years budget to this new budget rather than actual to new budget.
· Why does the comment by the medical insurance line item say only number of employees not insurance cost increase? Is there something that this number is based on?
o FA offers a benefits plan where staff can choose to put their benefit dollars towards a variety of programs. If insurance rates increase too much, the employee will have to put more money to that instead of other options.
o At this point looking at the total labor percentage is more important than the details because that will define the outer limits and from there, all the factors within that budget will be adjusted.
o We do compare ourselves to other co-ops in this area for benchmarks.
· Why is the prepared foods area projected to grow 34%? Seems pretty aggressive.
o 2005 we budgeting 100% growth and the North store exceeded that.
o South Store will be double shelf space for grab and go.
· Are any 3rd store projections are included in the budget?
o No. This would come through a budget exception after reviewing a proforma.
· Where does the 3rd store money come from?
o Borrowed money.

Anne, Jerry and Dana leave

III        Approval of Consent Agenda:
Motion 10-2005 (#1) Motion to adopt the consent agenda items as written including: approval of September Board meeting minutes, approval of the October Board agenda, approval of committee meeting minutes, approval of retreat minutes, and approval of GM report. M/S Max/Toni. Motion passed 6-0-0.

IV      Approval of Minutes:
· Consent agenda

Review of L-10
Revision date: 2/16/05
Discussion:
· No suggestions

XIII        ORC Agenda Item: Owner Worker Program Review
Dave introduced the report. In general, the committee was in agreement that it was a good program. The loyalty of the people that are in the programs was astounding. Overall there were no major changes warranted. Suggestion that the cost savings might be found in the area of board compensation as their time is being accrued at 2 ½ times.
Discussion:
· This is one of the best reports they have ever seen from a committee. It is an exceptional example of how things should be reported to the board. Can it be made available for directing future adhoc committees?
· Even though many boards have discussed board compensation, no board has taken on the challenge of actually revamping it.
· The discount is a deferred liability and it is not being tracked that way. It is not a reflection of plush accommodations for the board.
· It is important to make the board position attractive and being able to thank them for their work.
· Should the chairs of the committees be compensated more?
o Not seen as an additional duty because all board members chair committees.
· Problem with discounts is that people end up getting compensated at different rates because of different amounts of groceries purchased. Can the hour and nominal value be related to a discount with a cap?
o Many cooperatives compensate at a set amount of money to get around that.
o Support OWs don't tend to think that the discounts are unequal so I don't think we want to go there.
· I like the idea of when you work you earn a pool that you can draw from when you shop as a way to track support OW hours. For example, if you work 2 hours I get $15 and when I get to the register I get 15% off my purchases up to $15 or whatever I have stored in my pool.
o Still limited by our register systems.
o This is a type of coupon system… see 5b
· Suggestion to not bring up more compensation ideas as the committee has already done the leg work and considered the options in this report.
· Do people feel they work 20hours a month on the board?
o In a rough calculation, I was surprised to find out I do only a little less than 20 hrs a week. I figured out I was making about $8 based on my families purchases. Recommend others to do it, over a longer period of time than a month.
o In preparation for meetings I do about 8 hours a month and sometimes up to 15hours. I feel I deserve the discount now but not necessarily after I'm off the board. The carry over doesn't make sense.
· What committee would address how much this cost is to the bottom line?
o It would be a full board decision.
· The board could shrink it now and for the future and not affect those getting it now.
· Suggestions to discuss at a future meeting and have board members bring back their ideas. Not necessarily next meeting because of the business at hand. Only put it on as an agenda item though if we are really going to do something with it.
o Michele could bring the total number of board members and former board members getting discount now.
o Get it on the calendar for another meeting through the executive committee.
o The dollar amount is small and if it helps people to get on the board we should not bother with it. Don't want to discourage service.
o If people are concerned about getting their money out of their directors, we should aim for 20 hours a month and fill the time with doing other meaningful service like reading more reports, etc.
o I disagree that it is a miniscule amount. The patronage refund is also miniscule but it is important.
o For me, I feel I would like to attract more people to the board and time is important. Compared to the dividend is given to owners that only contribute by buying it seems important, too.

Motion 10-2005 (#3) Motion to accept the ORC report. M/S Toni/Max. Motion passed 6-0-0.