The meeting began at 5:30 pm.
- Minutes
The minutes of the 10/26/2013 board meeting were approved with modifications (R1, 6/0/1 for/against/abstention).
- Time and place of regular meetings
A motion was passed to move the regular location of board meetings to the main branch of the Toledo-Lucas County Public Library (Black Room), 325 Michigan St., Toledo, OH 43604. Regular meetings will take place on the 4th Wednesday of each month. The next meeting will be on January 22nd 2014 (R2, 5/0/2).
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General Manager's Report:
GM Lisa Blake handed out her Manager's-Report dated 12-06-2013. The following topics were covered (further details can be found in the report):
Personnel and personnel development: Jennifer Mowka had agreed to take over as bulk manager. Dakota and Lisa had visited a conference in Ann Arbor to learn about category management. Sean and Sasha had visited a "Retail Basics" Conference in Minneapolis.
Finances: GM Lisa Blake has been working with Dennis Snell of SCORE to develop a better system for accounting of margins and of income by department [SCORE: "a nonprofit association dedicated to educating entrepreneurs and helping small businesses start, grow, and succeed nationwide"]. The overall margin was 32%. Lisa thought that this number did not account for various write-downs such as spoilage and thefts. Tom reiterated his concern that, although sales were improving, the cash position of the Co-op was still weak. Tom urged the manager to start using increasing sales to build up a cash reserve. In addition, re-opening a new credit line would be advantageous.
Parking lot:
- Potholes in the parking lot were a persistent problem.
- Customers had complained about poor lighting of the parking lot. Despite repeated calls to Toledo Edison, the problem was still not resolved.
Floor and other repairs: The Co-op had received a grant from NCGA over $4,641.03 for various items including floor and other repairs, Lisa's trip to Minneapolis, and Sasha and Sean's trip to the "retail basics conference." $1,000 was for the floor, and $2,300 for other expenses related to store maintenance, including labor. Lisa reported that she had paid herself back for using her credit card to cover Sean and Sasha's travel expenses. Tom suggested moving the $2,300 into the Co-op's expansion account, so it would not be spent on normal operating expenses. Board members agreed with and re-enforced that suggestion.
Sales: This year's November sales were 21.1% over last year's. Lisa attributed the success in part to a radio ad that she had purchased.
- Finance Committee report (Tom)
Tom reviewed data in the Profit-And-Loss and Year-To-Date (YTD) spreadsheets that Lisa had sent out prior to the meeting. Major points of his review were:
- October numbers showed a loss of $6,000, with sales of $48,000 and purchases of $40,000. He pointed out that a gross profit of $8,000 was rather low to cover all expenses. The main variable that could be adjusted was the cost of goods purchased. He suggested monitoring sales each week, taking fixed costs into account, and using those numbers to project what the Co-op could afford to purchase.
- The reported number for Cost of Goods Sold (COGS) was difficult to interpret and did not reveal what was actually spent on goods because COGS contained adjustments (e.g. due to changes in value of inventory) in addition to what was actually bought.
- Despite an increase in sales the Co-op was still losing money albeit at a slower rate (the current year-to-date loss was $6,000 compared with last year's YTD loss of $8,000). Most likely this apparent loss would be found in the value of inventory.
- The Co-op's cash position was still weak. The goal for the next six months should be to strengthen the Co-op's sales and its cash position in order to avoid repeatedly entering emergency situations. Maintaining margin was a lower priority than building cash.
- Nichole Nauden initiated a discussion about the role of the 4% UNFI volume discount in the Co-op's finances. A consensus emerged that although achieving that discount was desirable, The Co-op should not take up credit or drain equity to obtain the discount.
- Outreach Committee report (David Bohon)
David Bohon reported about a recent meeting of the Outreach Committee. Major points were:
- He suggested starting "a member picks" weekly initiative.
- The regular Saturday tasting events should be documented and publicized regularly, for example in "Saturday Awakenings" (a free publication in the area, new to the Detroit area).
- Radio advertising was a good idea. However, we needed to monitor the benefits derived from it.
- Members should get incentives for referring new members, such as an additional discount.
- Members, especially board members, should have information about the Co-op in their cars to be given out at any opportunity that may arise.
- David reported that a friend of his, Warren Dick, was an exceptional vegan chef. Warren would be willing to help promote the Co-op and had consented to put on a cooking demonstration.
- The Co-op should consider printing T-shirts.
During a follow-up discussion after David's report, several more recommendations were made:
- David recommended having more involvement with the University of Toledo. Tom promised to pursue this further, for example giving all students a discount to be announced by bulk email.
- Nichole suggested that board members, rather than staff, should recruit and welcome new members, for example by handing out a prepared bag with informational material.
- Tom said expanding the Co-op's email list to ~1,000 should be a high priority. Sándor commented that currently the size of the list was ~740. David suggested contacting members who had been lost during the Co-op's past controversies would be a good start. Calling new members asking them to volunteer would also help.
- David would like to see "smiling faces" on the website rather than pictures of fruits and vegetables; although Nichole emphasized that website visitors should see something recognizable that readily conveyed the Co-op's mission.
- David and Hermann suggested that new members should be given a guided tour of the Co-op.
- 6. Executive Committee report
Sean reported on a recent executive committee meeting during which a new membership model had been discussed. The idea was to revert back to a subscription model rather than maintaining the current equity model. A number of variants were discussed including a hybrid fee/equity model. Suggestions included:
- Members could be offered the option of receiving their equity back or have their equity counted towards annual membership payments until the equity was used up.
- The annual membership fee could be paid in the form of delayed discounts until the value of the discounts equaled the annual fee (delayed discount model). This option would require a point of sales system recording purchases of each member.
- In a variant model described by Sándor regular payments would have to be made only up to a certain amount. Once that amount was reached no further fee payments would be necessary. This was essentially a continued equity model in which membership status was maintained as long as payments were current (hybrid equity/fee model). Some co-ops in the Central Corridor required members build up a large equity over time (e.g. $200).
- In another version of the revised equity model (or hybrid equity/fee model) members could purchase more than one share over time and derive benefits from that. [According to the current equity model, members can hold only one share.]
An annual fee-based or hybrid model would have several advantages:
- It would be easier to account for active members. Currently it was difficult to get a total count of members and determine a quorum at membership meetings.
- A regular fee would improve the cash position of the Co-op and reduce (and ultimately eliminate) the debt incurred as a consequence of spending member's equity (debt in the "escrow account").
Tom and Lisa cautioned that it was not clear, from a legal point of view, that the Co-op could revert to a subscription model. Lisa was in favor of a hybrid system.
Tom Fine left the meeting
Anita moved to table the discussion until the legality of all options was clear. The motion passed (R3, 4/0/2).
Anita Levin left the meeting
- General Manager's evaluation
Hermann presented a score sheet based on the Register of Policies. Sean suggested to prepare a condensed score sheet for the next board meeting.
- Farewell to David Bohon
Prior to the vote to accept David's resignation, David was asked to speak and he suggested that the landlord should be pressed to finance repairs in exchange for signing a new lease.
A motion was passed to accept David Bohon's resignation (R4, 4/0/1). Sean thanked David for his many valuable contributions to the Co-op and David promised that he would continue to serve the Co-op as time allowed.
- Point of sales (POS) system
As a New-Year resolution Sean and Hermann promised to investigate a Point-Of-Sales system that would alleviate many of the Co-op's problems. Before implementing the system its capabilities would be demonstrated to the Board and the manager.
- Adjournment
The meeting was adjourned at 7:50 pm (R5, 4/0/0).
Date of next meeting: January 22, if not decided otherwise.