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123 N. Hill St
South Bend, IN 46617

574-287-6724

Board Minutes

Board Meeting Minutes April, 2017

PPC Admin

April 20, 2017
Attending: Molly Moon, Danielle Meersman, Nick Licina, Fred Myers, Chris Hebron, Eli Williams, Tama Crisovan, Greg Koehler, Mike Geglio
Absent: Russ Pierce


Agenda Review: no adjustments

Review and approval of last meeting’s minutes:

Open Member Time: no guest members are in attendance.  

Review FY17Q1 B1: Financial Condition of co-op; Greg used a PowerPoint deck to lead the Board through the B1 review.  Detailed information is in the linked documents.  Primary points are summarized here:

1)     As with FY16 Annual Summary B1, sections 2 (net income), 3 (liquidity) and 4 (solvency) are out of compliance.  All other sections are in compliance.
 
2)     B1.2 The GM must not allow operations to generate an inadequate net income.
a)     To smooth out distortions, Greg is using net income + depreciation.  The target is 3% of sales; the 1st quarter measured below 0%
b)    Remediation plan for kitchen include the following:
i)      Increase margin minus labor (keep more of the price we sell at) for cafe and prepared food
ii)     Reduce labor
iii)    Increase sales: work with kitchen mgr to eliminate low margin products and find new products
iv)    Decrease food costs
3)     Remediation plan for store include the following:
a)     Increase MML for grocery and produce
b)    Reduce front labor
c)     Reduce produce labor
d)    Increase sales
4)     Additional items include
a)     Bookkeeper starting May 1
b)    Formal marketing plan
c)     Improved hiring and training
d)    Product margin analysis
e)     Track budget-to-actual monthly
f)     No new spending
 
5)     B1.3 The GM must not allow liquidity (the ability to meet cash needs in a timely and efficient fashion) to be insufficient.
a)     Cash is low, and current liabilities are high.  The Current and Quick Ratios are both below target values.
b)    Remediation plan includes the following:
i)      Pay off credit card fully each month
ii)     Decrease member-owner loans; 5 year plan submitted showing planned weekly set aside ($500 in 2017; $600 in 2018; $700 in 2019; $750 in 2020 and 2021) restricted to loan payoffs.  Where possible, some loans will be rescheduled or converted to store credit.
iii)    Increase current assets
(1)   Increase wholesale accounts with local restaurants
(2)   Increase net income
 
6)     B1.4 The GM must not allow solvency (the relationship of debt to equity) to be insufficient.
a)     The Debt to Equity ratio is 4.3, above the target limit of 3.0
b)    Remediation plan includes the following:
i)      Continue to reduce long-term debt
ii)     Increase new member equity
 
The board used the decision tree to assess the B1 report and remediation plans.  Before voting on the merit of the plans, Chris asked the Finance subcommittee if the monthly meetings have made them comfortable with the reported numbers and the merit of the plans.  Members of the subcommittee affirmed their support.  The board voted to accept the B1 report and the plans.

Action Item: Mike will schedule monthly Finance subcommittee meetings with the GM for upcoming months.

Board Education: Blue Zones
Rick Zeeff, the Beacon Health Community Well Being Coordinator explained the local Blue Zone projects.

Rick has been working in his current position for 1.5 years
Dan Buettner researched communities around the world where populations averaged longer life spans.  He wrote a book called The Blue Zones Solution describing his findings:
Genetics are not a primary factor
Focus is on external environment
Natural movement and activity
Outlook (multi-generational interactions, living with purpose)
Eating wisely
Forming supportive group bonds
Community experiments have shown that incremental progress in these areas have positive health impacts on community members
Beacon is working to initiate Blue Zones in South Bend and Elkhart
Rick described the areas of community focus and effort and support
Rick suggested that Purple Porch is a natural partner in the effort.  He suggested that PPC could collaborate by educating people on buying, preparing and eating healthy foods in the store and at community events
Rick sees benefits for stores and restaurants that qualify for Blue Zone certification as the movement progresses
Rick is currently working to raise $1M from local businesses and from foundations.  This will be used to hire staff who will coordinate volunteers and organize events.  He believes in a few months he will be ready to start working on the Elkhart Blue Zone.

Review B5 - B6 Monitoring Reports on Consumer and Staff Treatment
Greg found necessary improvements are needed in the following areas:

B5.1 The GM will not be unresponsive to customer needs.
Greg feels that the co-op lacks systematic ways of assessing customer and member-owner levels of satisfaction with the Cafe and store.  The proposed remediation plan includes the following:
Survey of shoppers in April and May.  Results to be used in future product selection, labor priorities and marketing plan development.
Work with CDS to develop a scoring method for measuring customer satisfaction.
Sales data analysis to evaluate shopping behaviors.
B5.3 The GM must not allow an unsafe shopping experience for our customers.
County Health inspector gave the store and cafe perfect scored in 2016.
The co-op lacks a method for formal documentation of accidents.
The co-op lacks a method for formal documentation of product recalls.
The remediation plans include:
Study industry average of customer accidents for similar sized stores
Develop forms that front store staff will be required to fill out in cases of accidents
Implement and promote awareness of PPC website on product recalls.  Full refunds will be offered to customers for any product recalled by a vendor.
B6.1 The GM must not operate without written personnel policies.
There is a policy handbook, and it is always available for review.  However, staff are not uniformly required to sign off that they have read the handbook.
The CDS model grievance procedure will be incorporated into the co-op’s personnel policies.
B6.2 The GM must not cause or allow personnel policies to be inconsistently applied.
Managers are not trained at least annually in their management duties.
Greg will work with CDS to develop an annual staff survey form.
B6.3 The GM must not provide for inadequate documentation, security or retention of personnel records and all personnel related decisions.
Employee records are kept locked, and only authorized people have access to the documents.
There is a need to conform to state and federal retention requirements.  Gred does not know what those requirements are, so he will research the regulations and create internal policies accordingly.
B6.4 The GM must not establish compensation and benefits that are internally or externally equitable.
Greg reported that each employee does not currently have a job description in their personnel file; and that he does not have regional labor compensation data to ensure that employees are compensated favorably compared to similar jobs.
Greg will research benefits or 3 comparable co-ops and research the US Dept of Labor National Compensation Survey for our region.
All other B5 and B6 sub-policies are in compliance.

The board used the decision tree to reach consensus that the proposed remediation plans are adequate for these compliance issues.  

Action Item: It was proposed that the progress on these items be reported on in October.  Motion was approved.

Ad Hoc Items: Does the bank loan contain language that it needs to be paid down before payments to unsecured loans can occur?  

Three action items:
Greg will review the loan documentation and update the board.
If there is no such language, Danielle suggested that we still should verify with the bank that if the co-op’s financial status is solid, the bank will refinance the loan so we avoid a balloon payment and that it is OK to pay down he member-owner loans in the meantime.
Molly made a motion that the GM update the board at the next 2 board meetings on the amount saved-to-date for the purpose of paying off member loans.  The motion was approved by the board.

Annual Member Meeting - preparations reviewed.  
Molly will drop off set up paraphernalia at the co-op Saturday; Mike will pick up the items and will go to the KofC Hall at 3:30 pm Sunday to set them up.
Eli will manage the music list.

June Board Retreat - the board needs to discuss and adopt Ends statements.  

Action Item:
Molly will contact Maple City and Thane to set a date for this event.

Meeting adjourns