SUBMITTED AGENDA ITEMS:

Review The 2005 FC Yearly Calendar And Work Plan
· Allocating funds for enhancing the coop's image is on the calendar but doesn't appear to be part of the finance committee's work. Looks like something that can be dropped from the calendar.
· We've added some reporting obligations, discussed the best month to do that in. Discussed whether it would be better right after the budgeting process in January or after the external audit in May. Await further information from the Calendar Committee for the best time. The format of the monitoring report needs to be developed. It will be based on the committee's charter. It's development will be added to the work plan, item #8

Identify Representative From Finance Committee To The New Calendar Committee
· Jerry, with his long time experience with the Finance committee, would seem to be the best choice. Jerry had tentatively told Max that that would be okay. When Jerry comes back, Sandra will check to see if that is still okay with him. John volunteered to be backup as needed.

Review Of May Financial Statements
· May was another great month. It's not an inventory month. Sales are above the budget by $26,000. Payroll expense is on target. A bonus was given in May for the 1st Qtr performance. Other operating expense was a little higher than usual. There are some exceptional expenses in May due to some trainings, both local and out of town. Net Income from Operations is $166,000 ahead of budget Year to Date. Donations income in May is high mostly due to the donation of an owner loan by one of our owners. Total Non-Operating Expense is $3,000 better than budget Year to Date. The net income is $22,000 for May and $142,000 Year to Date.
· The Cooperative Grocer's 2004 Survey just came out. The size categories have changed this year. Previously we were in the Extra Large category. This year we're in the Large category (at projected net sales of $11,000,000 for 2005). This has put us into a category with store that are closer to our size and now our numbers are much closer to the published benchmarks.
· The debt to equity ratio has improved from this time last year from 2.93 last May to 2.11 this May.
· The Board just approved a $200,000 capital budget exception for a rack compressor system. The funds for this new capital budget will be coming from either out of money in operations or the line of credit; it could be split as well. It's also possible that the Energy Trust Fund will pay for part of the costs. They haven't completed their energy audit yet, so we're not sure how much that will be. How the equipment is paid for is another cash management issue.

Discuss Topics from Work Plan Related to Cash Management:

Discuss Revised Policy for Cash Management
What Identified Funds are in Place and What are Proposed
Explore Adding a Contingency Fund as a Built in Source for Various Financial Items.

Reviewed the balance sheet and the cash asset accounts. Went over what the various accounts are restricted or designated for and how the cash flows between those accounts.
· Where the money is kept is one issue, but Michele's plans for using it would be more pertinent.
· We've started the planning process by setting up and funding various accounts with certain purposes in mind.
· When we're looking at managing cash and setting up these accounts, the Board should be able to get some handle on the possibility of giving a patronage dividend before the end of the year.
· A patronage refund shouldn't be decided before the annual financial results are known. Coops have gotten themselves in trouble by creating a patronage dividend expectation by their members. There may be times when it's more important to
· Deciding on what our cushion should be and then looking at our financials at the end of year to see what we may have left over to give back to our owners would be more comfortable.
· I don't know that I want to get into a long discussion about patronage dividend at this meeting. Looking at cash management for expenses like the capital purchase, I believe it's better to use our cash to buy the equipment now and then borrow money later if we end up needing to.
· To borrow or not is a tough questions. Splitting the difference seems like a good compromise. What I would like to see is operating funds listed, restricted, designated, I'd like to see all of the accounts related to the DOE, etc all put together. Operating, Designated, Restricted
· Having an extra sheet that helps to translate the balance sheet accounts as above.
· I'd like to see this list of accounts reorganized with the subtotals for each class of cash account. What could go to the Board is information on cash and the % of it that is in each class. A report needs to be put together for the board. We'll let the Board know that considerable thought and discussion has gone into this topic.
· Dana will develop this report and email it to Sandra for evaluation and corrections. The draft will then go out to the finance committee as a whole to review and comment on. Once it's done it will be forwarded to the Board.

Reviewed and discussed the cash management policy draft that Dana has been developed. Dana will take the feedback and incorporate it into the policy for Michele

Discuss "below-the-line" Community Outreach and Education Expenditures
§ Continued to August.

Meeting adjourned: 6:55pm