March 16, 2017
Attending: Russ Pierce, Molly Moon, Danielle Meersman, Nick Licina, Fred Myers, Chris Hebron, Greg Koehler, Mike Geglio
Absent: Eli Williams, Tama Crisovan
Russ proposed that the board choose a transition president for the period between his leaving and after the AMM in April, when the new board is assembled. All agree..
Review and approve last meeting’s minutes:
Minutes approved. Molly notes that there is no evidence in the minutes that the Decision Tree was applied in the last meeting, although there may have been opportunities.
Open Member Time: no guest members are in attendance.
Planning for Board Conversations
The purpose of the next discussion will be to develop a better understanding of how the co-op fits into the community; what are the demographics of the community; what other providers and services make up the community.
Nick identified potential speakers:
South Bend west side business community and city council person
Charlotte Wolfe, representing a group of local growers and marketers
Nick suggests 2 speakers, each provided a short period to speak and respond to questions
Nick will try to arrange this event for the next board meeting, and suggested the meeting time may need to be expanded
D3 - D4: Delegation to GM, and monitoring of GM
Review lead by Mike.
D3 states that the GM is enabled to establish any policies, practices or plans that follow a reasonable interpretation of the Ends and Executive Limitations established by the board.
D4 describes how and when the board evaluates GM performance, what the sources of information are, and how to apply the standard of reasonable interpretation.
D4 requires begin / end dates to define the range of information to be used in a GM evaluation; and the date by which the GM evaluation should be completed. Motion made to apply January 1 to December 31 of each year to the data collected for the evaluation; to require the fiscal year annual report by February 28 each year, and to complete the GM evaluation by the regularly scheduled March Board meeting.
Motion approved. Mike will update the Policy Governance document and save a final version.
April AMM Board and Board Elections:
The AMM event will occur on April 23 at the Knights of Columbus Hall; the format is pot luck. Doors open at 4:00 pm, the meal begins at 5:00, and the meeting commences at 6:00
Greg will provide a report on the state of the co-op
The transitional president of the board will act as master of ceremonies
Elections for board memberships will be held. The open positions are currently held by Russ, Eli, Danielle, Molly and Mike. Russ and Eli are not candidates for the new board.
Quorum discussion: by-laws have been changed to call for 5% of active member-owners (currently over 800) or 50 member-owners, whichever is less. To ensure that sufficient votes are collected, in-store voting will occur the week prior to the meeting, and we will allow AMM attendees who did not vote early to do so before we count the ballots.
Mike will write up the draft of an announcement to post on the PPC web-site and send out in the weekly email; all names of member-owners applying to serve on the board need to be passed to him by April 1
Nick will post candidate bios on the cork board in the store on April 2.
AMM prep and clean up
Molly: table centerpieces
Mike and Nick to clean up after
Proposed document reviewed and updated:
Dates for B2 and B7 are swapped, so that B2 is due in August and B7 is due in June. June is already scheduled for the Ends completion, so should be a busy month, and B2 will probably require more review and discussion than B7;
Add monthly reporting from GM to Finance Committee
Russ notes that Maple City will be sending new Board members to the CBL 101 presentation in Ann Arbor in May, and we could coordinate with them. All agree that is a good idea to follow up on.
Transition board president needed to replace Russ at the end of this month until new board officers are appointed after the AMM. Molly nominated Nick, he was willing, and the board approved.
Review FY16 Annual B1: Financial Condition of co-op
B1-1: Sales Growth - in compliance
Benchmark is 3%;
FY16 revenue is 11% greater than FY15
FY16 gross profit is 16% greater than FY15
Co-op was able to buy larger quantities at lower prices, due in part to the big cooler and freezer
Discussion about benchmarks: should we use a suggested value (i.e., 3%) or determine the value we need in order to be successful in paying down co-op debt?
Decision Tree used to reach acceptance of this report item
B1-2: Net Income - out of compliance
Danielle explains that EBITDA is a more fair measure, as it is a more smoothed ratio that resists incidental distortion and so allows for a better indication of real change. Depreciation, for example, skews Net Income. So although the BI calls for Net Income, we may want to use EBITDA in the future.
Greg agrees to use EBITDA in the future
B1-3 Liquidity - out of compliance
Member-Owner loans coming due over the next 3 years:
Larger payouts are due after that.
Discussion about the need for a measureable plan to manage the debts. Co-op is not in healthy financial condition due to the debt load. Specific remedies are needed in a multi-year plan.
Discussion about Policy Governance and how to evaluate remediation plans. Greg provided steps in the submitted B1. These were reviewed and generally considered as positive, but they need to include measureable goals, in percentages or dollars.
Decision Tree outcome allows the board to request more information. The board requests that FY17Q1 B1 report include measurable targets in the corrective plan. Greg agrees to that.
Finance Committee will meet with Greg between now and the next board meeting, when the FY17Q1 B1 is due. Mike will arrange meeting date(s) with the committee and Greg tomorrow.
GM Feedback - Greg was asked to summarize a meeting last week with Russ, Nick and Mike. The topic was board concerns about GM management during FY16, and the need to develop a corrective plan with specific actions, dates and costs. Greg reported that he is working on the plan, which will be emailed to Russ Sunday March 19, and then distributed to the rest of the board.
Executive Session: GM Evaluation discussion: